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Credit, Capital and the Missing Middle
The Weekend Playlist
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Good morning.
India does not appear short of capital. The harder question is where all that money ultimately goes.
Bhavesh Jain shows how formal credit is reaching more Indians, even as lenders increasingly favour borrowers they already know. Gopal Jain looks at another part of the same system: how domestic savings can flow into alternatives and finance companies before they reach public markets. Partha Chatterjee takes the question one step further. If firms cannot grow from small to mid-sized, neither capital nor economic growth will easily translate into better jobs and stronger household incomes.
The common challenge is one of conversion: turning deeper credit, larger savings and stronger capital markets into business growth, better jobs and household prosperity.
WEEKEND EDITION
What India’s Borrowing Data Reveals
India’s credit market is getting bigger. But is it becoming easier for a new borrower to enter it?
In this episode of the Weekend Edition, financial journalist Govindraj Ethiraj speaks with Bhavesh Jain of TransUnion CIBIL, about how a decade of formalisation is reshaping consumer and MSME borrowing. The share of credit-active Indians has risen from 11% to 28%, while younger consumers, women and borrowers in states such as Uttar Pradesh are becoming more visible in the formal system.
Yet lenders are increasingly favouring people who already have a credit history. New-to-credit borrowers now account for only about 12–13% of retail borrowers, while two-thirds of new credit cards go to people who already own one. MSMEs show a similar pattern, even as millions of businesses remain outside formal lending.
Meanwhile, weekly credit reporting is giving lenders a much sharper view of borrower behaviour and making repayment history increasingly valuable.
Key Insight
There has been a striking improvement in MSME risk profiles: the proportion categorised as low-risk borrowers has risen from around 13% to 37% in five years.
SPECIAL EDITION
India’s Alternative Capital Moment
Can India’s growing pool of domestic savings fund the businesses that will define its next phase of growth?
In this episode of the Special Edition, Govindraj Ethiraj speaks with Gopal Jain of Gaja Capital about the rise of alternative investments as Indians save for longer lives and the economy creates more opportunities outside public markets. Jain points to a striking shift: India’s alternatives market has expanded rapidly over the past decade, while domestic institutions and wealthy investors are beginning to replace overseas capital as an important source of funding.
Yet alternatives are not simply another route to higher returns. They involve greater risk, longer holding periods and more specialised manager selection. Their larger economic role lies in financing companies before they reach public markets, particularly as entrepreneurship moves from consumer internet businesses towards deep tech, advanced materials, space and AI.
Key Insight
The constraint on India’s alternatives market is increasingly not a lack of savings, but the institutional pipes connecting domestic capital to private funds.
THE CORE QUIZ
Which messaging platform is facing government scrutiny over its proposed username feature? |
HOW INDIA’S ECONOMY WORKS
Why Growth Isn’t Reaching Households
Why has faster economic growth not translated into stronger household prosperity?
In this episode of How India’s Economy Works, Pooja Mehra speaks with Professor Partha Chatterjee about the gap between India’s headline growth and the economic mobility available to its households. He traces much of it to a “missing middle”: too few firms grow from small businesses into productive mid-sized enterprises capable of creating better-paying jobs.
Yet simply improving roads, credit access or ease of doing business will not close that gap. Firms also need financing as they scale, access to land, reliable courts, skilled workers and incentives to innovate rather than remain small. Policy thresholds can themselves discourage growth by making the transition to a larger firm more difficult.
Why This Matters
Policies designed around regulatory cut-offs can make remaining small more attractive than scaling, weakening the very firms India needs to create better jobs.
SPOTIFY UNLOCK
Longer lives. Rising costs. Market volatility. Uncertain returns.
The assumptions that once shaped retirement planning are being challenged, and the rules of long-term wealth creation are changing with them.
The Core, in partnership with Spotify Unlock, invites a select group of senior leaders, founders and investors to a closed-door conversation on Building Wealth for a Longer Life, moderated by Govindraj Etihraj in conversation with Saurabh Mukherjea, Founder & CIO, Marcellus Investment Managers.
August 25, 2026 | 8:30 AM | Lower Parel, Mumbai
MESSAGE FROM OUR SPONSOR
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