India’s Falling Loan Defaults Mask Rising Household Debt Risks

People in India are borrowing more money, and their debt is growing faster than the economy per person.

Some families may be borrowing to manage living costs or keep buying things.

Loan growth has picked up, though it is not rising equally for every kind of loan.

Fewer personal-loan borrowers are falling behind on payments than before.

But that does not necessarily mean families have less debt or are financially safer.

A person might pay current bills while taking on more loans.

If their income falls or borrowing becomes harder, repaying could become difficult.

Banks and other lenders need to check whether borrowers can afford all their loans.