Perils of the 'push' loan phenomenon and rural India's rising debt burden

Rural households are increasingly depending on borrowed money to meet everyday consumption needs, a practice that is not sustainable in the long run

India’s fast-moving consumer goods sector grew 5.7 per cent by value and 4.1 per cent by volume in the July-September quarter driven by rural demand, consumer intelligence firm NielsenIQ said in its quarterly update last week. Yet, many feel that the state of India’s rural economy, particularly rural indebtedness, is a matter of concern. Some non-banking financial companies (NBFCs) are complicating the scene further by trying to fish in troubled waters.

 

The Reserve Bank of India (RBI) has taken note of the growing issue of “push” loans — loans that are aggressively marketed to individuals who may not fully grasp