New Delhi, Sept. 23 -- India is entering a strong unsecured credit growth cycle, led by personal loans, supported by improving asset quality, stable household leverage, abundant system liquidity and a more risk-on approach from lenders, according to a report by UBS.

The report said the outlook comes after a three-year credit cycle across microfinance, personal loans, credit cards and unsecured business loans, with asset quality improving materially across most segments.

"We believe India is entering a strong unsecured credit growth cycle, led by personal loans," UBS said in the report.

It added that the expected acceleration is being supported by healthy asset quality across banks and non-banking financial companies (NBFCs), flat unsec...