Mumbai, October 5, 2026: Non-Banking Financial Companies (NBFCs) have emerged as a major gateway to formal credit in India, accounting for 47% of New-to-Credit (NTC) consumer originations as of June 2026, according to a joint report by the Finance Industry Development Council (FIDC) and TransUnion CIBIL.
Titled “Bharat Nirman: NBFC Forming the Foundation of Credit Dispersion,” the report highlights the growing role of NBFCs in expanding access to credit across consumer segments, geographies and businesses. It noted that 36% of credit-eligible consumers have accessed credit through an NBFC, while 46% of all credit-active consumers currently hold an NBFC loan.
Over the past decade, NBFCs have expanded their credit-active consumer base nearly sevenfold, growing approximately 2.5 times faster than the overall credit industry. Their share of retail loan originations increased from 33% in June 2016 to 43% in June 2026.
NBFCs have also strengthened their position in small-ticket lending. Loans of up to ₹2 lakh account for 82% of consumer credit originations by volume, with NBFCs contributing 47% of originations in this segment compared with 17% for banks.
Their reach has expanded significantly across semi-urban and rural markets. These markets account for more than 58% of NBFC loans by volume, while the share of consumers from semi-urban and rural areas in the NBFC credit-active base increased from 31% in 2016 to 59% in 2026.
The borrower base has also become more diverse. Women’s share of NBFC credit-active consumers increased from 18% to 27%, while the share of credit-experienced consumers rose from 35% to 49% over the same period.
Bhavesh Jain, MD & CEO, TransUnion CIBIL, said the NBFC sector has developed a significantly larger role in India’s credit ecosystem over the past decade. He highlighted the sector’s expanding presence across geographies and borrower segments and said the next phase would focus on building deeper, longer-term relationships as customers’ credit needs evolve.
The report also highlighted improvements in NBFC portfolio quality. The share of above-prime consumers increased from 24% in June 2019 to 32% in June 2026, while 90+ days balance-level delinquency declined from 2.7% to 1.1%.
Credit awareness among NBFC consumers has increased as well. The proportion of consumers monitoring their credit rose from 3% in June 2018 to 48% in June 2026. Among consumers who had previously been delinquent, 52% of credit-monitoring consumers returned to regular repayment within 12 months, compared with 48% among similar consumers who did not monitor their credit.
Raman Aggarwal, CEO, FIDC, said NBFCs are now more deeply embedded in India’s credit system, with their reach extending across smaller towns, first-time borrowers, nano and micro enterprises and increasingly established businesses.
Beyond consumer credit, NBFCs are expanding their presence in commercial lending. Their share of credit-active commercial entities increased from 10% in June 2021 to 18% in June 2026, while NBFC-served entities grew 2.2 times compared with 1.2 times growth in the overall commercial lending market.
Also Read: Federal Bank Appoints Virat Diwanji as Executive Director
The report also found a shift towards more established and lower-risk borrowers. The share of partnership and proprietorship entities among NBFC-served credit-active entities increased from 73% to 82%, while low-risk commercial entities increased from 14% to 51%.
With first-time borrower growth beginning to moderate, the report identifies deeper customer relationships, greater credit awareness and broader lending solutions as the next opportunities for NBFCs. Their expanding presence across consumers, businesses and geographies is expected to keep them central to India’s next phase of credit growth and financial inclusion.
