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Key Points

Growth in loan originations for younger consumers has slowed down significantly. This slowdown contributed to a drop in the overall Credit Market Indicator. However, demand from semi-urban and rural areas is showing strong momentum. The report suggests this signals a maturing market focused on sustainable growth.

Key Points: Young Borrower Loan Growth Slows to 6% as Rural Demand Rises

  • Loan growth for young borrowers aged 18-35 slowed to 6% from 9% a year ago
  • The overall Credit Market Indicator dropped to 98 reflecting softer demand
  • Semi-urban and rural loan originations rose 9% providing market cushion
  • Personal loans led rural growth at 15% while credit card demand declined
  • The share of young borrowers in total demand fell to 56% from 58%
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Loan growth among young borrowers slows to 6% in June quarter: TransUnion CIBIL

TransUnion CIBIL reports loan originations for 18-35 age group slowed to 6% in June 2025 quarter, while semi-urban and rural markets show strong 9% growth.

"India's credit landscape is evolving with resilience in semi-urban and rural demand, a strategic shift toward secured lending, and stable portfolio performance. - Bhavesh Jain, MD and CEO, TransUnion CIBIL"

New Delhi, September 24

Growth in loan originations for younger consumers slowed to six per cent in the quarter ended June 2025, down from nine per cent in the same period last year, according to TransUnion CIBIL's September 2025 Credit Market Report.

The slowdown in demand from the 18-35 age group contributed to the Credit Market Indicator (CMI) dropping to 98 in the first quarter of FY26, compared to the same period a year ago.

The CMI is a composite index that tracks the health of India's credit market across demand, supply, consumer behaviour, and performance.

Within younger consumers, the share of total demand fell to 56 per cent during the June 2025 quarter, compared to 58 per cent a year ago. Enquiry volumes for personal loans, consumer durable loans, and gold loans remained strong, but credit card demand declined. Loan originations from younger borrowers in metros and urban areas have also dropped by three per cent over the past two years.

"The recent dip in credit demand from this segment may reflect a more cautious mindset. While this may be temporary, it is a reminder of how important it is to equip young borrowers with the right tools and support to help them grow confidently along their credit journey," Jain said.

The report, however, noted that while demand from younger borrowers tapered, semi-urban and rural regions registered stronger momentum. Loan origination volumes in these geographies rose nine per cent year-on-year, providing a cushion to the overall market.

Rural and semi-urban markets saw the highest growth in personal loan originations at 15 per cent year-on-year, followed by consumer durable loans at 9 per cent and gold loans at 7 per cent. The share of these regions in total loan originations edged up to 61 per cent in the June quarter.

"Proactive portfolio monitoring in certain segments such as two-wheeler loans, unsecured business loans and commercial vehicle loans, along with strengthening risk frameworks, is essential for inclusive growth," Jain added.

"India's credit landscape is evolving with resilience in semi-urban and rural demand, a strategic shift toward secured lending, and stable portfolio performance. These trends signal a maturing market focused on sustainable and inclusive growth," said Bhavesh Jain, MD and CEO, TransUnion CIBIL.

- ANI

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Reader Comments

R
Rohit P
Good to see rural areas showing growth! This shows financial inclusion is working. Maybe banks should focus more on tier 2-3 cities where people actually need credit for small businesses.
S
Sarah B
The decline in credit card demand is interesting. After the RBI's recent regulations on unsecured lending, young people might be more cautious. Probably a healthy correction in the market.
A
Arjun K
Job market uncertainty is making many young professionals think twice before taking loans. EMI burden is scary when job security isn't guaranteed. Better safe than sorry! 💯
M
Michael C
While the overall slowdown might seem concerning, the shift towards secured lending and rural growth indicates a maturing credit ecosystem. This could lead to more sustainable growth long-term.
N
Nisha Z
I appreciate that the report acknowledges the need for better financial education. Many young borrowers take loans without understanding the terms properly. Financial literacy should be part of college curriculum.
K
Karthik V
The 15% growth in personal loans in rural areas is impressive! Shows that Bharat is rising while India's metros are slowing down. Maybe the real growth story is happening in our villages. 🇮🇳

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