Equifax flags younger, digital borrowers as India retail credit’s growth engine
Equifax India says aspirational borrowers are reshaping retail credit, with demand spreading into semi-urban and rural markets. The trend raises the relevance of responsible EMI, BNPL and embedded-credit offers, while high unsecured exposure and small-ticket defaults sharpen underwriting risk.
What happened
Equifax India says younger, digitally assessed and rural borrowers are driving retail credit growth. Aspirational borrowers accounted for 79% of JFM 2026
Key facts
- 8 crore aspirational borrowers accounted for 79% of 14 crore retail credit originations in JFM 2026
- Aspirational-originations value: ₹19 lakh crore; overall industry: ₹24 lakh crore
- Aspirational borrowers' outstanding AUM: ₹132 lakh crore as of June 2026; overall retail industry: ₹167 lakh crore
- 73% of aspirational credit value came from semi-urban and rural markets
- 58.4% of retail debt is unsecured
- 31% of Gen Z consumers held two or more active credit accounts at initial origination
- Sub-₹50,000 personal loans had a 6.4% default rate
- Sub-prime borrowers allocated 48% of loan proceeds to lifestyle consumption
Why this matters
Prioritize partnerships with fintechs, credit bureaus and lenders that combine rural-market reach with strong alternative-data underwriting and collections capabilities.
What to watch
- 30- and 90-day delinquency trends for small-ticket unsecured loans, especially among first-time borrowers.
- Lender approval-rate, credit-limit and no-cost-EMI policy changes by geography and customer cohort.
- RBI or regulatory action affecting BNPL structures, digital lending, KYC, data use or merchant credit marketing.
- Growth in retail credit inquiries and originations in tier-2, tier-3 and rural districts.
- Merchant-funded EMI subsidy increases, lender take-rate revisions and withdrawal of promotional financing by major banks or fintechs.
- Fraud, identity mismatch and return-abuse rates on financed ecommerce and omnichannel orders.
- Integrate multiple lending and BNPL partners to preserve approval rates while avoiding concentration in a single underwriting model.
- Use first-party transaction, returns, repayment and loyalty data to target financing offers toward lower-risk repeat customers.
- Set category-level guardrails for financed sales, including minimum down payments, ticket-size caps and margin thresholds for high-default segments.
- Expand assisted digital-credit journeys in semi-urban stores while strengthening KYC, fraud checks and post-sale collections coordination.
- Measure financed-sales profitability net of subsidy, chargebacks, returns, delinquencies and partner incentive changes rather than conversion alone.