According to a report published in the Statistical Ministry’s bi-annual book Sarvekshana, people in South India are more likely to have debts than those in other parts of the country. Financial experts attribute this to the region’s higher prosperity, which allows people to borrow and repay loans more effectively.
The data revealed that 2 out of every 5 people in Andhra Pradesh were indebted, accounting for 43.7% of the state’s population. This was followed by Telangana (37.2%), Kerala (29.9%), Tamil Nadu (29.4%), Puducherry (28.3%), and Karnataka (23.2%).
In contrast, India’s overall adult indebtedness stood at 15%, showing a significant regional variation. The study found a direct correlation between household income and debt, suggesting that wealthier households tend to borrow more. However, it also noted an inverse relationship between indebtedness and household size, meaning smaller families are more likely to carry debt.
Researchers noted that Southern states have higher per capita incomes, better asset ownership, and stronger financial inclusion, leading to greater access to credit. As a result, the overall indebtedness rate is higher in these regions.
The report added that since people in South India have higher disposable incomes, creditors view them as more reliable borrowers, which further fuels credit activity.
