NBFCs Drive 50% of New-to-Credit Originations, Expanding Financial Inclusion Across India’s Semi-Urban and Rural Markets

(L-R) Bhavesh Jain, MD & CEO, TransUniuon CIBIL with Raman Agarwal, CEO, FIDC at the launch of the report

• NBFCs have become a powerhouse of credit inclusion, growing their credit-active consumer base by nearly 7 times over the past decade – approximately 2.5 times faster than the overall credit industry. 
• NBFCs continue to expand access across the credit spectrum, while leading lending to below prime consumers, who make up 35% of their credit-active consumers base. 
• NBFCs have established themselves as the lender of choice for small-ticket credit, accounting for 47% of loan originations below ₹2 lakh

Non-Banking Financial Companies (NBFCs) have become a major gateway to formal credit in India, accounting for nearly half (47%) of New-to-Credit (NTC) consumer originations as of June 2026. Today, 36% of credit-eligible consumers have accessed credit through an NBFC, while 46% of all credit-active consumers hold an NBFC loan, according to Bharat Nirman: NBFC Forming the Foundation of Credit Dispersion, a joint report by the Finance Industry Development Council (FIDC) and TransUnion CIBIL.

NBFC Growth Trends

NBFCs have grown steadily over the past decade, with their credit-active consumer base expanding nearly sevenfold and their share of retail loan originations rising from 33% to 43%. At the same time, first-time borrowers accounted for a smaller share of NBFC originations, declining from 28% in June 2016 to 16% in June 2026, showing that NBFCs are increasingly serving borrowers who already have a credit history.

• NBFCs accounted for 43% of retail loan originations by volume
• Share by value stood at 30% in June 2026
• Strong presence in smaller-ticket lending

Smaller-Ticket Lending and Deeper Reach

Loans of up to ₹2 lakh account for 82% of consumer credit industry origination volumes, and NBFCs contribute 47% of originations in this segment, compared with 17% for banks.

Semi-urban and rural (SuRu) markets account for more than 58% of NBFC loans by volume.

Changing Composition of Borrower Base

• Semi-urban and rural share rose from 31% to 59%
• Women’s share increased from 18% to 27%
• Credit-experienced consumers rose from 35% to 49%
• Younger consumers rose from 44% to 47%

Executive Commentary

Bhavesh Jain, MD & CEO, TransUnion CIBIL, said: “The NBFC sector has come a long way over the last decade and today plays a much larger role in how credit reaches consumers across India... NBFCs will remain an important part of expanding access, improving credit outcomes and supporting sustainable growth across India’s credit ecosystem.”

Diverse Credit Needs

• Consumption credit increased from 51% to 62%
• Business-oriented credit rose from 4% to 11%
• Vehicle credit declined from 27% to 24%
• Mortgage credit declined from 10% to 7%

Portfolio Quality

• Above prime consumers rose from 24% to 32%
• Delinquency declined from 2.7% to 1.1%
• Credit monitoring consumers rose from 3% to 48%

FIDC Commentary

Raman Aggarwal, CEO, FIDC, said: “The NBFC sector today is far more deeply embedded in India’s credit system than it was a decade ago... This is a more mature NBFC sector, with a larger role in financing enterprise, economic activity and consumption across India.”

Commercial Lending Growth

• NBFC share of credit-active commercial entities rose from 10% to 18%
• NBFC-served entities grew 2.2x vs 1.2x overall market
• Partnership/proprietorship share rose from 73% to 82%
• Low-risk commercial entities rose from 14% to 51%

Future Opportunities

First-time borrower growth is moderating, placing greater focus on deeper relationships, broader product participation, and evolving borrower needs.

About FIDC

Finance Industry Development Council (FIDC) has been the voice and face of the NBFC sector for the last 22 years... RBI recognised FIDC as the Self Regulatory Organization (SRO) for NBFCs and HFCs in India.

About TransUnion CIBIL

India’s pioneer credit information company, TransUnion CIBIL, ensures the credit history of each person and business entity is reliably represented... For more information visit www.transunioncibil.com