Younger borrowers drive new credit growth, mid-age segment anchors loan portfolios: Report, Pg24

Key Highlights:

• Younger borrowers (30 and below) are driving new credit growth and unsecured lending in India as of November 2025.
• Individuals aged 31-40 hold the largest share of outstanding loan value and balances.
• Overall asset quality improved between November 2024 and November 2025, but early-stage stress is visible among younger borrowers, especially in unsecured loans.
• Borrowers aged 26-30 recorded the fastest growth in numbers over the past year.
• Those aged 25 and below constitute over one-third of all first-time borrowers.

Detailed Insights:

• The rise in younger borrowers reflects increased access to credit, but initial repayment challenges persist, particularly with unsecured loans.
• Borrowers aged 31-40 represent a significant portion of active loans due to peak earning years and higher borrowing capacity.
• Unsecured lending, including consumer durable loans, credit cards, and personal loans, is primarily driven by borrowers aged 30 and below.
• Secured lending, such as auto and home loans, is concentrated among borrowers aged 31-50, aligning with life-stage decisions.
• Private sector banks and Non-Banking Financial Companies (NBFCs) are targeting borrowers under 40 for unsecured products, while public sector banks prioritize borrowers aged 31-50 with secured lending.
• Early-stage delinquencies are more evident in unsecured products like credit cards and personal loans among younger borrowers.
• Term working capital loans and auto loans also show early signs of stress among younger borrowers, indicating broader repayment pressures.

Key Concepts Involved:

• Unsecured Loan: A loan issued and supported only by the borrower's creditworthiness, rather than by any type of collateral.
• Secured Loan: A loan backed by collateral, such as property or assets, which the lender can seize if the borrower defaults.
• Delinquency: Failure to make payments on time according to the terms of a loan or credit agreement.
• Non-Banking Financial Company (NBFC): Institution that provides bank-like financial services but does not hold a banking license.