India has expanded credit availability at a rapid pace in the past decade. Digital lending platforms, and priority sector initiatives have all contributed to this growth. The widespread digitisation of services, combined with the increasing penetration of smart phones and the availability of easy-to-use and intuitive applications, has created an ecosystem where quick credit options are within reach for millions of people.
This transformation has driven credit growth in India, with merchants becoming more receptive to accepting credit for goods and services and consumers across both urban and rural geographies showing rising demand for consumption goods.
This surge in credit activity has undoubtedly acted as an engine of growth for the Indian economy. Credit has enabled individuals to fulfil their aspirations, small businesses to expand, and entrepreneurs to fund new ideas.
However, for this momentum to translate into sustained growth, it is not enough to only provide access to credit. True long-term progress requires building a credit culture – a framework where borrowers understand their responsibilities, practice financial discipline, and treat repayment as an obligation rather than an option.
From credit access to credit responsibility
We have already seen remarkable technological advancements in financial services. Automation has now matured into full digitalisation, creating mostly frictionless customer journeys where loans can be approved and disbursed in minutes. Credit has become easy, affordable, and accessible across different segments of society and generations.
Yet, this easy availability also brings a risk: without a strong sense of responsibility, borrowers may misuse credit, fall into cycles of debt, or damage their financial health. Therefore, what India needs at this juncture is not just access, but a culture, one rooted in financial education and literacy.
A robust credit culture begins with awareness. A borrower must be able to distinguish between credit taken for necessity and credit taken for discretionary spending. Borrowing for income-generating activities or essential needs can create value. Maintaining disciplined repayment is equally essential.
Making timely payments, avoiding late fees, and preventing the accumulation of unnecessary interest are critical behaviours that sustain financial health. A borrower who ignores these principles risks damaging not only their own credit record but also the broader credit ecosystem.
Why borrower awareness matters
Understanding the impact of borrowing behaviour on one’s credit score is another vital aspect. Today, credit bureaus maintain detailed reports that track repayment history, outstanding balances, and overall credit conduct. Every missed or delayed payment leaves a mark on the credit report, lowering the score and reducing the ability to access future loans.
Lenders increasingly rely on these scores and reports to assess the risk of lending, meaning that today’s repayment discipline directly influences tomorrow’s borrowing opportunities. Prudence requires that borrowers stay informed about their credit scores and reports, reviewing them regularly to assess the impact of their behaviour.
Lenders’ role in building a healthy credit ecosystem
On the supply side, lenders also play an important role in fostering a healthy credit culture. While technology has made it easier to disburse loans quickly, it is equally important for financial institutions to educate borrowers, conduct due diligence, and encourage responsible credit use.
Blindly expanding access without considering the repayment capacity of borrowers may lead to a rise in defaults, weakening the entire financial system. For India’s economy to prosper sustainably on the back of credit, lenders must balance accessibility with responsibility.
For India, credit will remain a central driver of growth. But unless a culture of responsibility, literacy, and discipline is cultivated across generations, easy access alone may create more risks than rewards. Borrowers, lenders, and policymakers must collectively ensure that credit is not seen as free money but as a trust-based instrument that fuels sustainable growth.
In conclusion, India’s journey from credit access to credit culture is essential. Access has already been expanded through digitisation, mobile connectivity, and innovative fintech solutions. The next stage is to build a culture where financial education empowers borrowers, where repayment is timely and disciplined, and where credit behaviour today secures opportunities for tomorrow. Only then can India ensure that the engine of credit continues to power the economy in a sustainable, inclusive, and responsible manner.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, legal, or professional advice. While every effort has been made to ensure accuracy, readers should verify details independently and consult relevant professionals before making financial decisions. The views expressed are based on current industry trends and regulatory frameworks, which may change over time. Neither the author nor the publisher is responsible for any decisions based on this content.
Ramkumar Gunasekaran, Wholetime Director, CRIF High Mark
