As per news release dated 21.5.2018 issued by Trans Union CIBIL, a Credit Information Company, a study by the company has calculated that approximately 220 million consumers meet the target age range - from 20 to 69 - and income level of at least ₹ 2,50,000 per year, to be attractive to lenders for retail products. On this basis, it states that the total population of “credit-eligible” consumers in India is roughly 220 million, and further states that, of this eligible population, only about one-third - 72 million - are currently credit active, meaning that they have a live account with a bank or lending institution, while the remainder - nearly 150 million - are not currently credit active, but would meet the age and income requirements that would make them potentially attractive to lenders.

Eligibility for credit is a function of a potential borrower’s repayment capacity and creditworthiness. Repayment capacity is assessed on the basis of both income and expenditure cash flows, as well as assets and liabilities. Further, creditworthiness is reflected in the borrower’s track record in meeting credit and other payment obligations such as taxes and utility bill, as well as the borrower’s risk profile.

It is not correct to make age and income criteria as the primary basis for arriving at the figure of the potential eligible consumers for credit as credit is based on demand for it and is also dependent on the repayment capacity, applicant’s liabilities, including tax liabilities, availability of requisite details and documents to enable the bank to arrive at a decision in its commercial judgement with due regard to the technical feasibility and economic viability of the proposal and the creditworthiness of the applicant, in accordance with the bank’s Board-approved loan policy.

Government has taken a number of steps to make the credit-seeking experience hassle-free. These steps enabling more and more potential borrowers under credit net so as to boost the economy include, inter alia, the following: 

1. With the mandate of Pradhan Mantri Jan Dhan Yojana not being limited to opening deposit accounts but to also enable access to credit, banks led by PSBs have been extending credit through the overdraft facility, available under the scheme, to accountholders having satisfactory conduct of account.
2. For MSMEs, Pradhan Mantri MUDRA Yojana, for providing loans up to ₹ 10 lakh to non-corporate, non-farm small and micro enterprises, and Stand Up India scheme, for extending institutional credit system for loans between ₹ 10 lakh and ₹ 1 crore to undeserved strata of society like the Scheduled Castes and the Scheduled Tribes, and women entrepreneurs, have been successfully launched by the Government. Further, Public Sector Banks (PSBs) have taken the initiative for hassle-free and expeditious in principle approval for loans to MSMEs in contactless digital mode through the psbloansin59minutes.com platform,which private sector banks have subsequently on-boarded and all PSBs have on-boarded the Trade Receivable electronic Discounting System (TReDS) platform, enabling online discounting of trade receivables by MSMEs for faster realisation against the receivables.
3. To further improve the system of loan sanctioning and disbursement PSBs, reforms initiated by Government under PSB Reforms Agenda include, inter alia, the following:

 

1. For time-bound credit decision making for better turnaround time of loan proposals, comprehensive Loan Management Systems (LMS) have been put in place in banks for personal segment and MSME loans
2. Decision-making layers for loan sanctioning have been rationalised and restricted to a maximum of three layers.
3. Proactive reach-out and faster automated processing for personal loans have been enabled to greater use of dedicated sales channels, including digital channels, co-origination of loans in tie-up with non-banking financial companies, external partnerships and dedicated marketing workforce.

 

4. For agriculture, RuPay Kisan Credit Card (KCC), a smart card cum debit card has been introduced to meet the production credit requirements of farmers in a timely and hassle-free manner.
5. Vidya Lakshmi, a common web-based portal (www.vidyalakshmi.co.in), has been launched to facilitate education loans application to banks on an anytime, anywhere basis.

 All these steps taken by the Government have enabled India’s rank on “Ease of getting credit” in World Bank’s Ease of Doing Business Index to improve steadily from 44 in 2016 to 22 in 2018. Further, year-on-year domestic credit growth from the banking system has risen to 13.8% as on 31.3.2019, as per RBI data.

 This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Rajya Sabha.

Credit eligibility depends on repayment capacity and creditworthiness, not demographic thresholds, shaping access and lending processes. The note emphasises that credit eligibility should be determined by repayment capacity and creditworthiness-assessed via income and expenditure flows, assets and liabilities, payment history and risk profile-rather than by age and income thresholds alone; it further summarises government-led measures and public sector bank reforms (digital platforms, targeted lending schemes, Loan Management Systems, streamlined sanctioning and co-origination) intended to expand access to credit while preserving banks' Board-approved commercial lending judgments.