Mortgage approvals have already fallen sharply and surveys indicate that banks are eager to restrict other types of consumer lending.
HSBC, which is due to report results for 2007 today, is under pressure from investors to focus on emerging markets after suffering heavy losses in its consumer lending operations in the us.
The bulk of Fair Finance's loans are consumer lending (for children's school kit, home improvements and such like) rather than for start-ups.
"BPI, Philippines Savings Bank, and a lot of consumer lending institutions go into consumer lending as a product, so it's a product driven strategy," he said.
Banks must use the proceeds for new consumer lending.
Raising reserve requirements even further might not have enough of an impact to slow consumer lending.
Speaking at a summit of the World Economic Forum in New Delhi Tuesday, Palaniappan Chidambaram called for Indian consumer lending rates to drop several points from the current 13 percent level.
With margins like these, it was hardly surprising that foreign financiers and hedge funds flocked into consumer lending in Japan at a speed notably faster than Mr Kawamura's wobbly bicycle.
