Summary of this article
By Sachin Seth, Regional Managing Director – CRIF India & South Asia
India’s festive season is more than a period of heightened consumption – it is a barometer of the country's evolving relationship with formal credit. From first-time borrowers pledging gold to salaried professionals converting major purchases into EMIs, festive spending today offers a unique lens into the aspirations, confidence and financial behaviour of Indian households.
Latest analysis shows that India’s retail credit market reached Rs 178.6 lakh crore as of June 2026, growing 19.2 per cent year-on-year. Within consumption lending, gold loans grew 62.2 per cent, consumer durable loans expanded 36.6 per cent, and auto loans increased 18 per cent year-on-year. The numbers point to formal credit supporting a wider range of household requirements, encompassing consumption, asset creation and liquidity management. The sharp growth in gold loans also highlights how consumers view formal credit as a liquidity-management tool rather than a measure of financial stress, reflecting growing confidence in regulated borrowing channels.
But as access to credit expands, how consumers use credit becomes just as important as their ability to access it. This makes checking one’s credit report before taking on a significant festive expense particularly useful. Understanding existing loans, repayment history, credit-card utilisation and overall exposure can give consumers a more realistic view of how much additional credit they can comfortably take on.
The same discipline becomes even more important during the festive season. Attractive offers, instant approvals and the ease of converting purchases into EMIs can make individual transactions appear affordable. Yet affordability should not be judged by a single monthly instalment in isolation. A new EMI needs to be considered alongside existing loan repayments, credit-card balances, recurring household expenses and expected cash flows.
The objective should not be to avoid credit, but to use it without compromising tomorrow’s financial flexibility. Consumers increasingly manage multiple obligations across credit cards, instalment loans and secured or unsecured credit products. Regular credit-health monitoring should become an important financial habit rather than an activity undertaken only while applying for a new loan.
For consumers entering formal credit for the first time, this discipline becomes particularly significant. Gold loans, for instance, accounted for 18.3 per cent of new-to-credit borrowers. The first borrowing experience can begin shaping a consumer’s credit profile, making timely and disciplined repayment important not only for the immediate loan but also for future access to a broader range of financial products.
The responsibility does not end once the festive season is over. A period of higher spending should ideally be followed by a review of one’s financial position. Consumers carrying elevated credit-card balances can prioritise bringing outstanding amounts down, while continuing to meet repayment obligations on time.
Importantly, expanding credit access need not necessarily deteriorate credit behaviour. According to our data, delinquency levels across several major consumption-loan categories have remained broadly stable or improved. This points towards a market that is not only expanding but is also showing signs of greater maturity through repayment discipline and evolving lender risk assessment.
The next phase of India’s retail credit evolution will ultimately be shaped by how effectively the ecosystem converts wider access into sustained financial resilience. Better data insights, regular credit-health monitoring and more contextual lending decisions can help consumers move from episodic borrowing towards informed participation in the formal credit ecosystem.
Festive credit can help finance an aspiration today; its larger enduring value, however, lies in how responsibly that credit is managed thereafter. A strong credit profile can help consumers access opportunities; disciplined borrowing can help protect it; and responsible repayment can strengthen it for the future.
When access, awareness and repayment discipline advance together, credit becomes more than a means of financing celebration. It becomes an instrument for building long-term financial resilience and a credible financial identity. India's festive season will always be associated with aspiration and optimism. The real opportunity before the industry is to ensure that every festive borrowing decision not only finances a celebration today but also strengthens a consumer's financial future tomorrow.
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
