Lenders shifting focus from unsecured to secured loans, say senior bankers

Group 1 - The shift from unsecured loans to secured loans is becoming more pronounced among lenders, driven by higher delinquencies in the unsecured loan sector and rising gold prices [1][5] - The growth of unsecured personal loans has moderated after a period of overheating in the industry, leading to a strategic focus on secured loans, particularly in the SME lending space [2] - The State Bank of India (SBI) reports that its slippages in personal loans are low at 1-1.1%, indicating a strong credit quality in its chosen segments, including auto loans with high average CIBIL scores [3] Group 2 - The gold loan portfolio of banks has seen significant growth over the last two quarters, attributed to a decline in unsecured business loans and borrowers leveraging idle jewelry assets due to high interest rates [5] - According to Experian, the growth rate of unsecured loans, including credit cards and personal loans, has decreased to 9-18% year-on-year in September 2025, compared to 20-35% year-on-year growth in September 2024 [4]