Small Finance Banks gain 8% incremental market share

Small finance banks are gaining energy with them getting 8% incremental market share whereas their total share remains to be round 1%.

In the previous three-and-a-half years, SFBs have delivered a strong 42 % compound annual development charge (CAGR) adopted by private banks at 13 % and overseas banks 8 % whereas mortgage development for public sector banks was at the bottom at 2 % throughout the identical interval.

This displays the demand for small ticket loans in rural and semi city pockets – sometimes the main target space for SFBs — and in addition reveals that large lenders are focusing solely on high rated credit score. These banks take pleasure in robust credit score market share at over 2 % in semi-urban areas.

SFBs have created a distinct segment place in small-ticket loans (which account for about 40 % of whole SFB loans) and are regularly getting into into new credit score merchandise, ICICI Securities stated in a report.