2 weeks ago

India's Credit Growth Spreads Beyond Big Cities as Inclusion Grows

India's Credit Growth Spreads Beyond Big Cities as Inclusion Grows
As India grows, so does its appetite for credit. But who is being left out? · livemint.com

In India, more and more people are borrowing money these days.

Some borrow to buy a house, a vehicle, or to start a business.

Some borrow instead of selling their savings, because they think the loan costs less than the money their savings could earn.

Lending is growing fastest in villages and small towns, not just big cities.

People can even get very small loans, like ₹5,000, using phone apps.

India still borrows much less than richer countries, so there is plenty of room to grow.

Many young people are starting to borrow, so it is important they learn how loans work.

Some people, like farmers, gig workers, and women starting businesses, are harder for banks to understand.

Banks and technology companies are working together to make credit fairer and easier for everyone.

If done carefully, this can help India become a stronger economy.

Key facts

Credit growth rate
Roughly 14-16% annually in recent years
Main growth regions
Rural and semi-urban areas
Growing loan categories
Gold loans, home loans, vehicle financing
Small loan example
Unsecured purchases as small as ₹5,000 via digital platforms
Household debt-to-GDP ratio
Well below levels in developed economies
Underserved segments
Rural borrowers, self-employed, gig workers, women entrepreneurs, MSMEs
Industry response
Digital infrastructure, tailored products, financial literacy programs
Related policy mention
RBI proposing internal ceilings on what small borrowers pay on loans

Sources

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