Make Mine Subprime ; Even As Bankers in the Us Run Scared of Subprime Borrowers, Those in India Are Going Out of Their Way to Woo Them. Why? Blame It On the Booming Economy.

Summary

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A little over a year ago, Jamir Khan was a worried man. As the owner of a one-man (himself) buffing workshop in Faridabad near Delhi, Khan was doing brisk business. In fact, things were so good that Khan began thinking along the lines of expanding his workshop. With a steady stream of orders flowing, the 29-year-old thought getting a bank loan would be a breeze. He couldn't have been more wrong. His own banker, who had been serving him with a savings account for eight years, said no. Reason: The colony he lived in was unauthorised and, therefore, the bank was worried about Khan's status as a borrower.

Just when Khan was beginning to think of falling back on one of his friends or relatives, GE Money stepped in. Undeterred by the status of Khan's colony, GE Money instead looked at the micro- entrepreneur's cash flow and found it reassuring enough to lend him Rs 25,000, against his demand for Rs 50,000. Last month, the lender hiked Khan's loan amount to Rs 68,000. He is happy as can be. "What I liked was that they gave me the money," says Khan as a matter of fact.

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Make Mine Subprime ; Even As Bankers in the Us Run Scared of Subprime Borrowers, Those in India Are Going Out of Their Way to Woo Them. Why? Blame It On the Booming Economy.

Even as banks in the US run scared of 'subprime' (or, less than creditworthy) borrowers, lenders in India are going out of their way to woo them. Although the typical Indian subprime borrower (See A Subprime Profile) isn't comparable to his American counterpart, the financial services industry here has taken to describing this category ...

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