Less than 25% of retail loans went to first-timers in FY25

Mumbai: First time borrowers or ' New to credit' comprise less than a quarter of fresh retail loans disbursed in most categories in FY'25 even as their share has slowly risen over the previous year, data from credit bureau CRIF Highmark showed.

Among others, this reflects caution among lenders although two-wheeler loans are an exception. First time borrowers for two-wheeler purchases account for nearly half -49.2%- of these loans disbursed during 2024-25 compared to 49.1 % in the previous year.

The credit bureau classifies customers with inadequate credit history as "New to Credit'. Rising asset quality concerns have made bankers very cautious while extending loans. Experts say that besides lack of knowledge about an individual's borrowing history, many do not meet income criteria.

Besides, the employment of records of many potential borrowers are also questionable as they do not have a stable job history. Some loans are rejected because of lack of correct documents or even multiple loan applications.