MUMBAI: Until quite recently, Vaishakh Sudhakaran was burdened with debts. Without any savings to fall back on after the company he was working for shut down, he was “stuck” when he could not find another job.With rent and bills to pay and his family to take care of, he found himself drawn to advertisements on social media from loan apps offering speed and simplicity.Eventually, he took multiple loans ranging from 5,000 to 30,000 rupees (US$52 to US$314) from different platforms. But his desperation did not end there. “(For) a few months, I lost hope. I was like, ‘How do I repay this?’ the 30-year-old recalled.Business owner Purva Matkar, 28, knows what that pressure is like. She had also started taking loans a few years ago, when she “had nothing” and could not even afford basic necessities.
“I didn’t have any other option but those loans (via lending apps),” she said. “That was one of the easiest, and the quickest, way for me to get money.”
Purva Matkar is the owner of a chocolate shop.
But she fretted whenever a due date for payment got closer.“I used to be like, ‘How can I get work? What can I do? How (did) I get into this whole situation?’” she recounted. “Mentally, it was a big struggle. I’ve had major breakdowns.”Borrowing among young Indians like these two Mumbai residents is on the rise, in tandem with a boom in fintech lending — digital lending on platforms using technology to assess credit and issue loans.By June last year, the loan portfolio of fintech-driven non-banking financial companies hit 2.1 trillion rupees as the number of active loans grew by 25.6 per cent year on year, according to credit bureau CRIF High Mark.As people took on more debt, loans overdue by more than 180 days climbed from 7.1 per cent of the fintech portfolio in 2024 to 8.6 per cent last year.The borrowing goes beyond the fintech industry. Household debt stood at 47.8 per cent of the gross domestic product as at last December, up from 41.3 per cent nine months earlier.
