Lenders Fuel Higher Consumer Spending in India With Easy Credit

Some of India’s top lenders and shadow finance companies are helping fuel demand among consumers wanting to splurge on everything from clothes to two-wheelers and homes, offering hopes of a consumption-driven recovery in Asia’s third-largest economy.

Businesses are expecting sales during Diwali -- the Hindu festival of lights -- will pick up to levels seen before the pandemic struck early last year. That is in part because financiers, sitting on a huge pile of excess cash, are eager to lend with outstanding consumer durable loans already at its highest in more than three years. Borrowers want to take advantage of record low interest rates, an improving labor market as lockdowns ease and a better economic outlook as vaccinations gather pace.