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Consumer Finance Sector 2.5% Disposable Income Interest Cost, Up from 1.5% in 2021 | AirNews.in

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Consumer Finance Sector 2.5% Disposable Income Interest Cost, Up from 1.5% in 2021

about 1 hour ago

Published: October 5, 2026

Consumer Finance Sector 2.5% Disposable Income Interest Cost, Up from 1.5% in 2021

Interest costs now consume 2.5% of household disposable income, a steep climb from 1.5% in 2021. The sector’s leading stocks slipped 2% on the news, as lenders brace for tighter margins.

NSE’s Consumer Finance Index fell 1.8% after the RBI report flagged the surge in household interest outlays.

The 2.5% figure marks a 66% increase over the 2021 baseline, tightening consumer borrowing power across the country.

Bank‑based lenders saw a 3% contraction in net interest margins, reflecting the compression in loan yields and higher funding costs.

Analysts now anticipate a slowdown in loan growth for the next quarter; the sector’s annual guidance has been revised downward by an average of 1.5% in projected operating income.

Market watchers will focus on the upcoming RBI policy meeting, where interest rate adjustments could further influence the sector’s profitability trajectory.