No Assets, Just EMIs: How Consumption-Led Credit Doubled India's Borrower Base

Indian borrowers are no longer using credit primarily to build long-term assets like homes or vehicles. Instead, an explosion in digital, on-demand loans is funding everyday consumption and lifestyle spending, fundamentally changing how households across the nation manage their finances.

New data from credit bureau TransUnion CIBIL highlights this massive shift in formal finance. The bureau’s latest report, Unlocking Access: Journey of Credit Expansion in India, reveals that the proportion of credit-eligible adults who have taken a loan at least once more than doubled over the last nine years—jumping from 35% in March 2017 to 74% in March 2026.

While credit availability has expanded across the board, the sudden rise is largely fueled by a sharp appetite for consumer-led borrowing rather than traditional asset creation.

The Rise of Lifestyle Debt

Indian households are increasingly moving away from traditional, collateral-backed borrowing. Personal loans, credit cards, and instant Equated Monthly Instalments (EMIs) for consumer durables now make up 51% of all active credit wallets, up from 34% in 2017.

The total number of individuals holding these lifestyle-focused products quadrupled over the nine-year period."Credit is being increasingly seen as a means to drive a lifestyle-driven approach today, compared to the asset-based approach seen a decade ago," said Bhavesh Jain, Managing Director and CEO of TransUnion CIBIL.

Fintech applications, instant checkout options, and frictionless digital lending platforms have removed traditional barriers. Younger buyers in particular view items like smartphones and laptops not as luxury purchases, but as essential tools for daily work and productivity.

Beyond the Metros: Women and Small Towns Lead the Charge

The shift toward spending-led borrowing is no longer limited to male, salaried professionals in major metros. The report shows a clear broadening of India's borrower demographic:  

Women Borrowers: Female representation among credit-active consumers rose from 22% in March 2017 to 30% in March 2026.

Semi-Urban and Rural Reach: Tier-2, Tier-3, and rural regions now account for 63% of all active credit users, driven heavily by younger populations.

Shifting Regional Hubs: Northern and Central states are growing faster than traditional credit centres in Western and Southern India. Uttar Pradesh expanded its share of active borrowers to 11%, with Bihar and Madhya Pradesh registering steady gains.

Debt Risks and Regulatory Interventions

This rapid growth in unsecured borrowing brought initial challenges. The proportion of over-leveraged loan originations grew from 5% in FY2017 to a peak of 18% in FY2024, hitting younger demographics the hardest.

Proactive measures by regulators and financial institutions helped curb runaway risk, pulling that number down to 15% by March 2026. At the same time, consumer awareness is keeping pace with credit adoption. Active borrowers monitoring their own credit profiles soared from just 1% in 2018 to 35% in 2026, pointing to a population that is leveraging debt more frequently while keeping a closer watch on financial discipline.

Where Gujarat Stands?

Unlike traditional heavyweights in the West and South (like Maharashtra and Tamil Nadu), which saw their national market share shrink slightly as borrowing surged in Northern and Central India, Gujarat held its ground at 5%. It reflects steady, consistent credit activity relative to the rapid growth seen in states like Uttar Pradesh, Madhya Pradesh, and Bihar.