India’s average household debt rises 23% in 2 years, says financial expert
In a recent LinkedIn mission, Kamra emphasized a change in a change in household borrowing: non-residential retail loans, including credit card fees, personal loans and automobile loans, constitute 55% of the total home debt, while home loans are only 29%.
The comparison of retail loan growth before and after the pandemi reveals the depth of change:
Retail Loan Growth (CAGR):
Pandemik (FY09–19) vs Pandemik (FY19-24):
Credit Cards: 12.1% → 21.0%
Personal Loans: 15.1% → 18.2%
Vehicle Loans: 16.5% → 14.8%
Housing Loans: 19.0% → 15.5% Credit Card Expenditures saw the most dramatic growth and increased 13 times in the last 13 years – LA 12 Lakh Crore to 15.6 Lakh Crore. In the same period, the number of credit cards in use grew more than five times – from 2 Crore to 10.8 Crore.
Experts warn that unsecured lending increase may increase the default risks and reduce financial stability in the long term. While this tendency can temporarily increase the economic activity, it also points to a change in how young Indians approach money, credit and consumption.
The Indian Reserve Bank has collected red flags in recent months and warned against the sharp increase in personal credit and credit card debt, which can force household financing if not properly managed.
As this tendency deepens, he asks a critical question for borrowers, banks and policy makers: is this a sign of a changing consumer culture or a warning signal for future financial stress?
