India's central bank has responded to the growing popularity of unsecured consumer loans by requiring lenders to hold more capital against such credits. (Photo by Ken Kobayashi)

Indian consumer borrowing surges, raising fears of defaults

Unsecured loans give lower-income workers a chance to 'spend on things we really want'

SAYAN CHAKRABORTY, Nikkei staff writer

December 22, 2023 06:00 JST

BENGALURU -- Kripa Behera finds some temptations hard to ignore.

The 30-year-old cook who makes 25,000 rupees ($300) a month has used loans from banks and finance companies to help fund a spending spree in the last year or so. His purchases include a 75,000 rupee motorcycle and a 45,000 rupee iPhone, as well as a pair of Adidas sneakers and a Casio watch "for special occasions" that ran about 5,000 rupees each.