Mumbai, March 26 (NationPress) Gen Z is becoming a significant force in India's credit landscape, with 41 percent of first-time borrowers identified as part of this youthful cohort, according to a recent report published on Wednesday.

A report from TransUnion CIBIL indicates that lenders are proactively reaching out to new borrowers, particularly in rural areas and among women, to foster financial inclusion.

The findings reveal a noteworthy trend, as an increasing number of women are engaging with the formal credit system, making up 37 percent of first-time loan originations, a substantial rise from the 27 percent recorded among established borrowers.

Additionally, credit participation in rural regions is on the rise, with 32 percent of first-time borrowers hailing from these areas.

Lenders are encouraging newcomers to establish a robust credit history.

Statistics show that one in three consumers who obtained their first loan in FY22-23 secured a second credit product within a year, with 44 percent opting for the same lender.

This development reflects an increase in financial literacy and trust in the credit system. India's credit-eligible population, aged between 18 and 80 years, stands at approximately 1,036 million, with ongoing efforts aimed at integrating more individuals into the formal credit framework.

Gen Z constitutes a notable 34 percent of this demographic, and as they enter the workforce, their engagement in the credit markets is anticipated to grow.

The overall credit landscape remains stable, with secured loans demonstrating improved repayment behaviors.

Delinquency rates for personal loans among high-risk borrowers have also seen a slight enhancement, indicating responsible borrowing and repayment practices.

“Access to formal credit is a cornerstone of a stable financial ecosystem and is essential for achieving financial inclusion and empowerment,” commented Bhavesh Jain, MD and CEO of TransUnion CIBIL.

He further noted that sustainable credit growth among new-to-credit consumers can be realized by lenders employing advanced information analytics and tech-driven solutions.

The report also indicated a slight improvement in the Credit Market Indicator (CMI) for credit performance, rising to 101 in December 2024, up from 100 in December 2023.

Serious delinquencies, defined as loan payments overdue by 90 days or more, improved for secured loans.

For personal loans, delinquency rates among high-risk borrowers decreased to 4.54 percent in December 2024 from 4.85 percent a year prior.