Loan issues | New lending rules: delinquencies and frequent borrowing may now limit access to credit

Banks and MFIs have begun paying closer attention not only to a borrower’s income but also to their credit behavior. A bank loan delinquency of more than 30 days or even a one-day overdue payment on an MFI loan may be grounds for rejecting a new loan application.

Unsecured loans with terms longer than five years are now prohibited, while loans issued for three to five years are considered higher risk.

The new rules are aimed at curbing the “borrow–refinance–borrow again” cycle and reducing the debt burden on citizens.