MOSL: Fuel or Engines (Economy): What explains the deceleration in credit growth?
Fuel or Engines (Economy): What explains the deceleration in credit growth?; Revival in credit growth is easier said than done
- Based on our estimates, credit growth to the non-government non-financial (NGNF) sector has weakened to record-low of 6.4% YoY in 2QFY20. At the same time, incremental credit has declined ~90% YoY in 1HFY20.
- In order to adopt the right policies to address this slowdown, it is imperative to identify the factors behind this. Our analysis suggests that the deceleration in credit growth during the past 12-15 months is led by a combination of stable- to-marginally better demand and weaker supply, led by tight credit standards amid abundant liquidity. However, if the impact of demonetization is considered (which has affected growth numbers in the last 3 years), it can be concluded that while credit demand has weakened further, credit supply has improved.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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