India’s retail credit landscape is undergoing a structural shift, driven by rising consumer aspiration, increasing preference for premium products, and rapid adoption of digital-first lending models, according to trends observed by HDB Financial Services.
Across categories, consumers are showing greater confidence in discretionary spending, with a clear move towards mid to high-ticket products over entry-level options. This premiumisation trend is particularly visible in consumer electronics, where demand for higher-value smartphones and devices has grown steadily. The strong uptake of premium mobile phones reflects not just product preference but a broader socio-economic shift, as aspirational consumption expands beyond metros into Tier 2 and Tier 3 markets.
At the same time, lending is becoming increasingly digital. Nearly 99% of loans are now processed through digital channels, significantly reducing turnaround time and dependence on physical documentation. Lenders are leveraging bureau data, behavioural analytics, and AI-led credit scoring to enable faster decision-making, sharper risk assessment, and more personalised pricing, improving access to credit for a wider customer base.
Geographically, growth is being driven by a mix of established economic centres and high-consumption states. Uttar Pradesh, Tamil Nadu, Maharashtra, Rajasthan, and Gujarat have emerged as key growth markets. In addition to above, there are new pockets of demand growth coming from smaller centers like Betul, Hoogly and Alleppey underscoring an evolving credit map where demand is evenly distributed across industrial hubs and aspirational regions.
Commenting on these trends, Karthik Srinivasan, Chief Business Officer, HDB Financial Services, said: “We are seeing a clear shift in consumer behaviour, where aspiration, premiumisation, and convenience are shaping borrowing decisions. Customers today are more confident, digitally aware, and willing to invest in products that offer exceptional value across price-range. At HDB Financial Services, we are focused on leveraging technology and data-led insights to deliver faster, simpler, and more responsible credit solutions that align with these evolving needs, while expanding access across both metro and emerging markets.”
Strong seasonal demand continues for consumer durables, paired with a rise in digital lending as borrowers seek quick, flexible credit for everything from education to lifestyle improvements.
