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A Quick Look at How India is Borrowing in 2025

India’s lending ecosystem has evolved rapidly in recent years — shaped by technology, financial inclusion, changing borrower behavior, and regulatory innovation. From personal loans and credit cards to SME credit and corporate debt, here’s a snapshot of the key trends driving India’s lending market today.

• Personal Loans are Booming: Unsecured personal loans have grown by over 25% YoY (as of FY 2024-25), driven by rising aspirations, digital lending apps, and quick approvals.
   
• Home Loans Still Rule: Housing loans remain the largest segment in retail lending, supported by urban migration, government subsidies (like PMAY), and falling interest rates.
   
• Credit Card Penetration is Rising: With over 100 million credit cards in circulation, India is seeing a strong shift toward cashless consumption, especially among Gen Z and millennials.
   
• Gold Loans Go Mainstream: Rural and urban borrowers alike are increasingly turning to gold loans for short-term liquidity — with NBFCs dominating this space.
   
• Digital Lending is the New Normal: More than 50% of retail loans are now sourced digitally — thanks to fintech platforms, video KYC, and e-verification.
   

• Credit Gap Still Exists: Despite being the backbone of the economy, only ~15-20% of MSMEs in India have formal access to credit.
   
• Government Push: Schemes like CGTMSE, ECLGS, and PM MUDRA Yojana have supported credit flow to small businesses — especially post-COVID.
   
• Fintechs & Neo-banks Leading the Charge: Alternative lenders and digital platforms are bridging the credit gap using cash-flow-based underwriting and GST data.
   
• Invoice Financing is Gaining Ground: More MSMEs are using invoice discounting and supply chain finance to manage cash flow efficiently.
   

• Focus on Quality Borrowers: Banks and NBFCs are becoming more selective, with a preference for large, well-rated corporates with strong balance sheets.
   
• Project Financing is Making a Comeback: With renewed infrastructure push, sectors like energy, roads, and logistics are seeing increased project finance activity.
   
• ESG Financing on the Rise: Companies are raising capital through green bonds and sustainability-linked loans, reflecting global investor interest in ESG initiatives.
   
• Debt Market Diversification: Corporates are increasingly tapping into private credit, invITs, and REITs as alternatives to traditional bank loans.
   
• Corporate Bond Market Expanding: India’s corporate bond market is expected to cross ₹100 lakh crore in value, driven by SEBI reforms and institutional interest.
   

• AI-Powered Lending: Credit scoring, fraud detection, and loan underwriting are being revolutionized by AI and machine learning.
   
• Embedded Finance: Loans integrated directly into platforms (e.g., e-commerce, ERP tools) will be a game-changer, especially for SMEs and consumers.
   
• Tier 2 & 3 Cities Driving Growth: Smaller cities are leading the charge in retail and SME credit growth, thanks to increased digital adoption and financial awareness.
   

• India has over 65 million MSMEs, yet the formal credit penetration is still under 20%.
   
• The average ticket size of a digital personal loan is just ₹25,000 to ₹50,000, indicating rising micro-borrowing.
   
• Gold loan disbursements saw a surge of over 30% in rural India during the past two years.
   
• Corporate debt as a percentage of GDP in India remains significantly lower than global averages — signaling room for growth.
   

We stay ahead of these trends so our clients don’t have to. Whether you're an individual borrower, a small business owner, or a large corporate — we bring you the right funding solutions, backed by market insight and lender access.