Over the past decade, not only have Indians borrowed at an increasing rate whilst their incomes have stagnated, but now they are also one of the most indebted people across the world (excluding mortgages), surpassing the US and China. Most worryingly , most of these retail loans are NOT for creating assets but for satisfying daily consumption needs. To put this in historical context, India’s NET household financial savings (as a % of GDP) is at its lowest level in the last 50 years due to a steep rise in household financial liabilities.
Furthermore, if we were to look at the RBI’s Financial Stability Report from December 2024, it shows that not only have consumption related loans risen in the past several years, but also that 45% of all borrowers are sub-prime and nearly half of their loan requirement is towards consumption. This means that Indians today have not only borrowed money, but they have done so increasingly for sustenance and not asset creation.
Watch the latest podcast to learn more.
Read our blog on the Indian Middle Class and how their lifestyle has been fueled by debt:
https://marcellus.in/blogs/excessive-debt-and-the-illusion-of-wealth/
"Coffee and Investing with Saurabh Mukherjea" by Marcellus is your go-to podcast for deep dives into the Indian and global economies. Join Saurabh Mukherjea and his colleagues as they uncover the unique competitive edges (moats) of various companies and shed light on the market's challenges and opportunities. Tune in for engaging and insightful discussions!