Moneycontrol Pro Panorama | Easy money meets eager borrowers

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Dear Reader,

This year’s festive season has added a new twist to the consumption story -- an unprecedented appetite for instant credit.

Lending platforms and fintech NBFCs report a surge of up to 50 percent in demand for quick loans, helped by tax breaks, online discounts and a revival in discretionary spending, as per some reports.

This was seen from smartphones to jewellery.

Fintechs have become the new lenders of first resort.

Over 10.9 crore digital personal loans, worth more than Rs 1.06 lakh crore, were sanctioned in FY25 so far, according to industry data.

What’s striking is not just the volume, but the profile of borrowers.

It’s no longer only the cash-strapped or first-time credit users driving demand -- salaried professionals and established consumers are also signing up for BNPL offers and instant EMIs to keep cash flows smooth.

What does this mean for the lending industry?

This suggests that the UPI-linked credit lines, no-cost EMIs and buy-now-pay-later options have blurred the boundary between payment and borrowing.

For India’s middle class, especially in smaller cities, digital credit has made festive indulgence feel affordable -- at least for now. But lenders should know better than to mistake volume for stability.

Such a surge in festive lending offers a short-term boost, but can also stretch risk limits. Instant approvals often mean thinner underwriting. A flood of small-ticket borrowers, if not carefully screened, can turn into a repayment problem once the euphoria fades.

To be sure, regulators are aware of this; the government has already proposed stricter action against illegal digital lenders and opaque fee structures.

Logically, the better-run fintechs have taken note. Many are tightening scorecards, cutting exposure to first-time borrowers, and forming partnerships with banks to access low-cost funds.

The focus now is on quality growth -- cleaner portfolios, transparent pricing and repeat customers with solid repayment records.

What does it mean for borrowers?

Easy credit can be addictive. The festive sparkle fades quickly, but EMIs remain.

India’s household leverage is still modest compared to global levels, but the speed of credit expansion in the sub Rs 50,000 ticket segment deserves close attention.

The broader message is unmistakable: India’s consumption engine is now credit-driven.

The line between spending power and borrowing power is blurring. Chasing opportunity without ignoring prudence comes at a cost.

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Dinesh Unnikrishnan
Moneycontrol Pro