West Asia Crisis: Lender Support for Borrowers

Mumbai, Mar 31 (PTI) Lenders will have to handhold both retail and small businesses during the ongoing West Asia crisis like the way they did during the Covid pandemic, credit information company Transunion Cibil said.

It also said that the overall portfolio quality of the retail outstandings improved during the three months ended December.

"Lenders will have to do the hand-holding with the borrowers, not just for retail borrowers, but even the MSME borrowers," MD and CEO Bhavesh Jain said.

Support from the lenders will have to be akin to the one extended during the Covid crisis, Jain added.

TU Cibil will monitor the impact on the loan portfolios in the industry in the weeks and months ahead, he said amid the continuing war and calls from lenders for relief packages.

The lenders will have to be very diligent and extend loans only when needed, after going through past repayments and also income levels, he said.

The portfolio quality is holding on till February, but there the data for March is yet to be examined, he said.


For the quarter ended December, portfolio quality improved across all segments of retail lending except for micro-LAP (loans against property), where the advances overdue for over 90 days increased by over 35 basis pints on-year to 3.1 per cent.

Jain said lenders have been cautious when extending, including through measures like sticking to the much safer gold loans to expand books and also showing a proclivity to stick to existing borrowers to grow the loanbooks rather than signing up new credit customers.

There is also a preference for prime borrowers while extending credit, Jain said, pointing out that the overall proportion of lending to prime or above borrowers has increased by 2 percentage points in two years to 56 per cent as of December.

From an outstanding balances perspective, gold loans portfolio saw an acceleration in growth to 43 per cent in December 2025 as against 41 per cent in December 2024, while the steepest decline was in credit card outstandings, which grew by just 2 per cent as against 27 per cent in the year-ago period.

Personal loans, another kind of unsecured product, grew 11 per cent during the December quarter as against 12 per cent.

The faster clipped growth has made gold loans as the second biggest segment in retail, overtaking personal loans, Jain said.

However, the retail segment continues to be led by home loans, which are around three-times the size of gold loans, he said. However, the growth in home loan outstanding also declined to 11 per cent in December 2025 as against 14 per cent in the year-ago period.