Smartphone loan defaults surge amid push for premium upgrades

New Delhi: As brands and retailers increasingly push high-end premium smartphone sales through consumer durables financing, delinquency rates are on the rise. According to industry executives, the default rates on mobile phone financing is ranging between 2.7% and 2.9%, where a rate of 2% is generally expected.

In some areas where delinquency rates are even higher, financing companies are reducing the store’s rating and restricting lending to customers there, focusing only on those with good credit scores. Regulatory changes such as the one in Karnataka preventing recovery agents from collecting dues after 6 pm has led to further tightening, including blocking entire PIN codes that are deemed high-risks, executives said.