unsecured creditpersonal loanscredit bureausdigitalizationIndia economy
India Sees Growth in Unsecured Credit, Led by Digitalization and Credit Bureaus
Published: May 10, 2026
Loading article...
Loading article...
India's unsecured credit market has grown substantially over the past few years, driven by the development of credit bureaus and digitalization. This expansion has been led by two key catalysts: the maturing of India's credit bureaus and the increased use of data and technology in lending decisions.
The growth of unsecured credit has paved the way for high growth in personal loans, which do not require collateral. Instead, lenders evaluate borrowers' creditworthiness based on factors such as credit score, income stability, and repayment history.
Lenders consider two primary parameters when evaluating unsecured loan applications: capacity to repay and intent to repay. A borrower's income determines their capacity to repay, while their credit score and credit profile are used to assess their intent to repay.
The choice between secured and unsecured credit depends on a borrower's individual needs. While unsecured loans offer greater convenience and flexibility, they often come with higher interest rates and lower loan amounts compared to secured loans. The outlook for unsecured credit in India remains positive, with ongoing advances in digital technology and credit bureau development expected to further expand access to personal loans and other unsecured credit products. The Reserve Bank of India is likely to continue monitoring the growth of unsecured credit, with a focus on maintaining financial stability and protecting consumer interests.