NEW DELHI: Step into India’s booming consumer lending market, and you’ll see a financial sector supercharged by a growing economy, rapid urban expansion, and the vibrant aspirations of a new generation of buyers.
According to leading analytics firm GlobalData, the market is set for a steady climb, projected to clock a compound annual growth rate (CAGR) of 7.4 per cent between 2025 and 2029, reaching a record $1 trillion by 2029.
Growth drivers
The pulse of this momentum is unmistakable: consumer loan values surged by 27.6 per cent in 2023, powered by rising incomes and a dramatic shift in spending patterns. Even amidst global and domestic headwinds, India’s economy has stood tall as one of the fastest-growing among major nations.
The upward trajectory continued in 2024, with consumer loan value jumping another 11.5 per cent to touch $711.3 billion.
Ravi Sharma, lead banking and payments analyst at GlobalData, pinpoints the key catalysts: “India’s economic growth, government investment in infrastructure, and rising investments in housing are energizing the consumer loan market. As household incomes rise, so does the appetite for discretionary spending—from homes to vehicles and gadgets—driving further demand for credit.”
Headwinds and regional context
Yet, not all is smooth sailing. Persistent global economic uncertainties—including new US tariffs—could shake consumer confidence and cool new loan growth.
Despite these risks, India’s $758.8 billion consumer loan market in 2025 remains far behind China’s $8.3 trillion behemoth, and also trails regional powerhouses like Australia ($1.7 trillion), South Korea ($1.5 trillion), and Japan ($1.4 trillion).
At the heart of India’s loan surge is the mortgage segment, commanding a 50.7 per cent share of consumer lending by 2025. In the four-year period from 2020 to 2024, mortgage loans recorded a robust 19.1 per cent growth.
What’s fueling this? Affordable homes, increased housing supply, and policy initiatives like the Pradhan Mantri Awas Yojana have set the stage for sustained expansion.
Just behind mortgages, personal loans—including auto and consumer durables loans—account for nearly 44.7 per cent of the market in 2025. With the Reserve Bank of India (RBI) cutting repo rates from 6 per cent to 5.5 per cent in June 2025 (its third cut of the year), borrowing has become cheaper, making EMIs more manageable and opening the door for new borrowers.
Although credit card balances represent just 4.7 per cent of India’s total consumer loan value in 2025, this segment has boomed, delivering a striking 21.3 per cent CAGR from 2020 to 2024. What’s driving this surge? A sharp rise in e-commerce, improved point-of-sale (POS) infrastructure, and enticing rewards, cashback, and promotions from banks have all heightened card usage.
Despite unpredictable global geopolitics, India’s consumer lending market shows no signs of slowing. Government stability, a rising urban middle class, and evolving consumer habits will continue to bolster demand for credit.
GlobalData forecasts a 6.7 per cent expansion in the consumer lending market in 2025, reaching $758.8 billion. The foundation is strong, and if India weathers international headwinds, the road to $1 trillion is wide open.
