A new report by the Fintech Association for Consumer Empowerment (FACE), an RBI-recognised self-regulatory body, shows that portfolio quality for digital personal loans weakened slightly in FY25. Loans overdue by over 90 days rose to 3.6% in March 2025, up from 3.3% a year earlier. Defaults are higher in rural areas, Tier 3 towns, among young borrowers, and those with limited credit history.
are also rising. Reserve Bank of India (RBI) data shows unpaid dues in the credit card segment increased by 28.42% to ₹6,742 crore for the 12 months ending December 2024. Gross NPAs in credit cards now stand at 2.3% of total outstanding dues, compared to 2.06% a year ago, even as credit card usage and digital payment adoption continue to grow.
Experts caution that aggressive small-ticket and unsecured lending, particularly in rural areas, could result in over-leveraging.
Rishabh Goel, Co-founder and CEO of Credgenics, said loans under ₹10,000 have seen a 44% surge in defaults in non-metros. He pointed to the risk of borrowers managing multiple loans from four or more lenders.
To address this, Goel recommends longer repayment periods, improved use of local data in underwriting, technology-driven collections, and borrower awareness. He also highlighted the importance of tighter monitoring of unsecured lending — a step already reinforced by the RBI.
(Edited by : Akanksha Upadhyay)
