Published 15:00 IST, January 31st 2025
Economic Survey 2025: Consumer Credit Jumps 14.1% Between FY14 to FY24
The share of banks in the Indian credit market has declined from 77% in FY11 to 58% in FY22.

Economic Survey 2025: India’s financial sector is growing fast, fueled by rising consumer credit and booming equity markets.
Over the last decade, consumer credit has become a key driver in India's banking sector. Between FY14 and FY24, the share of consumer credit in total bank credit increased significantly, from 18.3% to 32.4%.
This sharp rise indicates a clear trend: Indians are borrowing more for personal expenses, such as buying homes, cars, and consumer goods.
The rise of non-banking financing
Alongside the rise in consumer credit, there has been a shift in how credit is being sourced. The dominance of banks in the Indian credit market has diminished over the years. In FY11, banks accounted for 77% of total credit, but by FY22, that share had dropped to 58%.
Non-bank financial companies (NBFCs) and bond markets have stepped in to fill this gap, providing essential financing for both consumers and businesses. This diversification of credit sources has its advantages, offering more options for borrowing. However, it also means that the financial system is now more complex and harder to regulate, with potential risks that could affect overall stability.
Booming equity markets
The equity markets have also experienced a boom, contributing notably to the financial sector's expansion. IPO listings have increased six-fold from FY13 to FY24, making India the global leader in IPO listings for FY24.
What’s driving this surge?
A new generation of young investors, particularly those under 30, has embraced the stock market. Their share in the market has grown from 23% in 2018 to 40% by September 2024. This demographic shift is helping fuel the market's rapid growth, but it also raises concerns about the risks of young, less-experienced investors being exposed to market volatility.
Financialisation is the concern
While the financial sector is booming, there is a growing concern that financialisation – the increasing influence of financial markets on economic policies – could overshadow the country’s long-term economic health. This phenomenon, which has already been seen in advanced economies, could lead to greater reliance on debt and a rise in inequality. Financial markets might start dictating macroeconomic decisions, where rising asset prices and leverage could drive economic growth, but at the expense of broader financial stability. If not carefully managed, this could result in the growth of debt-driven economic bubbles and worsen social inequality.
Updated 15:00 IST, January 31st 2025