Retail lending sector entering multi-decade growth cycle: ARAL

PTI New Delhi

India's retail lending sector is entering a multi-decade growth cycle, supported by digital underwriting, financial inclusion, rising household incomes and expansion of secured credit segments, according to a report released by Anand Rathi Advisors Limited (ARAL).

The study analyses the evolving landscape of housing finance, vehicle finance, gold loans and unsecured lending, highlighting the growing role of technology, data-driven underwriting and digital distribution in reshaping the credit ecosystem. According to the report, India is among the fastest-growing retail lending markets globally, aided by low mortgage penetration, underpenetrated vehicle financing and increasing formalisation of gold lending. It noted that favourable demographics, rapid urbanisation and technology-led credit delivery are expected to support sustained long-term growth.

The study highlighted that mortgage penetration in India remains at around 11% of GDP, significantly lower than in developed markets, indicating substantial growth potential. It also pointed to rising demand for affordable housing and the increasing adoption of digital underwriting models in the housing finance segment.