Tech is collecting loans it helped create

Mumbai-based IDFC First Bank’s return on equity (ROE) on retail loans is 18% to 20%, double its overall ROE. — Bloomberg

IT is becoming something of a post-pandemic mantra in India: A lender whose portfolio of unsecured retail loans is not increasing by 50% annually is simply not trying hard enough.

All kinds of bank and non-bank lenders are heaping credit on household balance sheets even though the consumer economy is fragile: A tiny minority that can afford luxury goods is in great financial shape, but low-income earners, especially outside large cities, are struggling with two-wheeler purchases and smartphone upgrades.