Nearly half of credit-active consumers hold loan from NBFC: Report

The report said 46 per cent of all credit-active consumers held an NBFC loan as of June 2026.

It stated, Today, 36 per cent of credit-eligible consumers have accessed credit through an NBFC, while 46 per cent of all credit-active consumers hold an NBFC loan.

The report showed that NBFCs have significantly expanded their consumer base over the past decade. Their credit-active consumer base grew nearly seven times between June 2016 and June 2026, while their share of retail loan originations by volume increased from 33 per cent to 43 per cent during the same period.

The growth has also been accompanied by a change in the type of borrowers served by NBFCs.

The share of first-time borrowers in NBFC originations declined from 28 per cent in June 2016 to 16 per cent in June 2026. At the same time, credit-experienced consumers increased their share of the NBFC credit-active base from 35 per cent to 49 per cent.

NBFCs have also developed a strong presence in small-ticket lending. Loans of up to Rs 2 lakh account for 82 per cent of consumer credit origination volumes. NBFCs accounted for 47 per cent of originations in this segment, compared with 17 per cent for banks.

Their reach has expanded beyond large urban centres as well. The share of consumers from semi-urban and rural markets in the NBFC credit-active base increased from 31 per cent in June 2016 to 59 per cent in June 2026.

The borrower base has also become more diverse. Women's share increased from 18 per cent to 27 per cent, while the share of younger consumers rose from 44 per cent to 47 per cent over the same period.

The report also highlighted that NBFCs are increasingly serving customers beyond their first formal loan. Among NBFC New-to-Credit consumers who entered formal credit during the six months ended June 2024 and still had a live loan in June 2026, 74 per cent remained exclusively with NBFCs.

Bhavesh Jain, MD and CEO of TransUnion CIBIL, said NBFCs now play a much larger role in how credit reaches consumers across India, with their reach extending beyond first-time borrowers to customers with more experience and varied financial needs.

He added, Its reach now extends well beyond first-time borrowers, with a growing presence among customers who are more experienced with credit and have more varied financial needs. We are also seeing the borrower base become broader across geographies and consumer segments, which reflects how the market itself is maturing. The next phase will be about building deeper and longer relationships with customers as their credit needs evolve.

NBFCs are also expanding their presence in commercial lending. Their share of credit-active commercial entities increased from 10 per cent in June 2021 to 18 per cent in June 2026. NBFC-served entities grew 2.2 times during this period, compared with 1.2 times growth in the overall commercial lending market.

The report also pointed to an improvement in portfolio quality. Between June 2019 and June 2026, the share of above-prime consumers increased from 24 per cent to 32 per cent, while 90-plus days balance-level delinquency declined from 2.7 per cent to 1.1 per cent. (ANI)