In FY2024–25, first-time borrowers—those with no or limited credit history, classified as ‘New to Credit’—accounted for less than a quarter of all fresh retail loan disbursals across most segments, according to data from credit bureau CRIF Highmark. While their share has marginally improved year-on-year, the numbers reflect continued caution among lenders amid growing concerns around asset quality and borrower risk profiles.
Two-wheeler loans stand out as an exception, where nearly 49.2% of disbursed loans went to first-time borrowers, slightly up from 49.1% the previous year. This indicates the segment’s relative affordability and higher accessibility for credit newbies.
Industry experts attribute the overall muted participation of new borrowers to several factors—lack of sufficient credit history, uCRIF Highmark data reveals that 'New to Credit' borrowers formed less than 25% of total fresh retail loan disbursals in FY25, reflecting cautious lending practices. Two-wheeler loans are the only category where first-time borrowers constitute nearly half the disbursements, indicating relatively easier access. Experts cite lack of credit history, unstable jobs, and documentation issues as key hurdles for first-time applicants.nstable job profiles, multiple loan applications, and missing or incorrect documentation. Additionally, many applicants do not meet banks’ income eligibility criteria, further impacting approvals.
Lenders, wary of potential delinquencies, are prioritizing borrowers with established repayment track records, especially amid macroeconomic uncertainties and rising default risks. The trend highlights the need for improved financial literacy, better documentation, and credit profiling systems to include a broader segment of underbanked consumers into the formal credit system.
CRIF Highmark data reveals that 'New to Credit' borrowers formed less than 25% of total fresh retail loan disbursals in FY25, reflecting cautious lending practices. Two-wheeler loans are the only category where first-time borrowers constitute nearly half the disbursements, indicating relatively easier access. Experts cite lack of credit history, unstable jobs, and documentation issues as key hurdles for first-time applicants.
