Rising interest rates have hit banks’ consumer finance business, particularly the housing loan segment. In the unsecured loan segment. The growth in personal loans has moderated to 20% at Rs 81,451 crore as on November 23, 2007, as against a 35% growth at Rs 1,05,034 crore in the previous year.
The dip in growth is led by a slowdown in housing loan portfolios of banks. Interest rates on home loans have increased to over 10%, affecting demand. The rising Real Estate Prices have also had an impact on the loan growth.