India is in the middle of a boom in financial inclusion with an increasing number of households getting access to credit. No wonder, household debt has scaled its peak of 42% of the GDP.
The ease of credit from a rising number of digital lending platforms and fintechs pushed the share of final private consumption expenditure (PFCE) in GDP to 61.5% in FY26. But the surge in the new-to-credit borrowers has exposed gaps in the traditional lending practices, especially in terms of collections.
Without strong collection practices, lenders…
