Mumbai, March 31 Lenders will need to provide support to both retail and small businesses during the ongoing West Asia crisis, in the same way they did during the Covid pandemic, said credit information company Transunion Cibil.
It also stated that the overall quality of the retail outstanding improved during the three months ended December.
"Lenders will need to provide support to borrowers, not just retail borrowers, but also MSME borrowers," said MD and CEO Bhavesh Jain.
The support from lenders will need to be similar to the one provided during the Covid crisis, Jain added.
TU Cibil will monitor the impact on loan portfolios in the industry in the coming weeks and months, amid the ongoing war and calls from lenders for relief packages.
Lenders will need to be very careful and extend loans only when needed, after reviewing past repayments and also income levels, he said.
The portfolio quality is holding until February, but the data for March has not yet been examined, he said.
For the quarter ended December, the quality of the portfolio improved across all segments of retail lending, except for micro-LAP (loans against property), where the outstanding advances overdue for over 90 days increased by over 35 basis points on-year to 3.1 per cent.
Jain said lenders have been cautious when extending credit, including through measures like sticking to safer gold loans to expand their books, and also showing a preference to retain existing borrowers to grow their 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, the 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 outstanding, 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 by 11 per cent during the December quarter as against 12 per cent.
This faster growth has made gold loans 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.