India Retail Lending Set for Multi-Decade Growth: Report

India's retail lending sector is entering a multi-decade growth cycle, driven by digital adoption and broader financial inclusion, according to a recent report. Rising incomes are adding momentum.

Housing and vehicle loans are set to expand significantly, the report said. Gold loans are also expected to grow. Technology and data analytics are reshaping how lenders assess credit, disburse loans, and manage risk.

Low credit penetration and rapid digital adoption were cited as the primary factors behind the trend. India's retail credit penetration remains low compared with other large economies, providing a long runway for expansion.

Digital platforms are helping lenders reach new customers in smaller cities and rural areas, the report noted. This shift is also reducing costs and improving turnaround times.

Vehicle loans are seeing demand from both personal and commercial segments. Gold loans remain popular in rural areas where formal credit access is still limited.

The report did not offer specific projections for the overall market size. It described the sector as being at the start of a multi-decade expansion.