Can Modi's home-for-all pledge create India's own subprime problem?

Indian banks have been channeling increasing amounts of credit to affordable housing after Modi promised to provide a home for every Indian family by 2022

Delinquencies are rising in the affordable housing sector, a pet project for Prime Minister Narendra Modi that’s touted as a main growth driver for Asia’s third-largest economy. Most of these were loans below Rs 200,000 ($3,100) made to some of the poorest Indians, whose incomes are now under threat as economic expansion slows.

"Loan defaults have been the largest and are rising in the smaller ticket sizes, creating our own subprime class," said Nilanjan Karfa, analyst at Jefferies India Pvt. "Indeed, default risks could be materially higher in the next one-to-two years."

Indian banks have been channeling increasing amounts of