India’s Credit Industry Maintains Strong Growth Momentum with Accelerated Sourcing and Improved Asset Quality: Experian Insights

India’s retail credit market expanded strongly, with AUM in Mar’26 reaching Rs. 137 lakh crores, up 19% YoY

New loan sourcing accelerates sharply in FY26, with originations rising 31% YoY to Rs. 75 lakh crores
Unsecured lending has resurged positively in FY26, after a contraction in the previous year
Secured lending gained significant traction, led by strong momentum in gold loans and housing finance
Asset quality strengthens further, with net 30+ delinquency easing to ~3.0% as of Mar’26
NBFC fintechs continue to drive retail credit expansion, particularly across unsecured segments and consumption-led products

Mumbai, 28, 2026: Experian, a leading global data and technology company, today released its latest Industry Insights – May 2026, highlighting a strong resurgence in India’s credit market, with broad-based growth across segments. The report also highlights continued growth in secured lending along with improving asset quality, reflecting a more resilient credit environment.

The report highlights a sharp uptick in credit activity, with total loan sourcing rising 31% YoY to Rs.75 lakh crore in FY26 while overall industry Assets Under Management (AUM) grew 19% YoY to Rs.137 lakh crores as of March 2026. These trends point to robust credit demand across retail consumer segments, supported by greater borrower confidence and improved underwriting discipline.

A key trend emerging from the report is the continued rise of secured lending, which has gained share within the overall portfolio mix. This growth has been primarily driven by gold loans, home loans, and other asset-backed products, indicating both lender preference for lower-risk portfolios and borrower inclination toward secured credit options. Gold loans continue to play a key role in expanding formal access to new to credit borrowers, supported by faster onboarding and simplified underwriting. Gold loans also play a role in enabling access to financing for household and entrepreneurial needs, including among women borrowers.

At the same time, unsecured lending has rebounded strongly in FY26, following a period of contraction in FY25, led by personal loans and consumer finance products, showing resilient consumer demand and growing borrower confidence. Personal lending in India is witnessing strong traction across Tier 2, 3, 4 cities, driven by deeper digital penetration and expanding lender outreach, particularly through Fintechs. Simultaneously, migration of personal loan consumers towards higher ticket gold loans reflects growing borrower preference for more affordable and collateral-backed credit products.

Importantly, asset quality has improved across the industry, with net 30+ delinquencies declining to ~3.0% in Mar’26 from higher levels last year, reflecting stronger underwriting, improved repayment behaviour, and disciplined lending practices.

From a lender perspective, NBFCs and fintechs have emerged as key growth drivers in retail lending particularly in unsecured and consumption-led products, leveraging faster onboarding and wider reach. Meanwhile, public sector banks have strengthened their position in secured lending segments, particularly in home loans and other priority-sector categories.

Commenting on the insights, Manish Jain, Country Managing Director of Experian India, said “India’s financial ecosystem is witnessing a phase of sustained momentum, supported by strong underlying economic activity and growing confidence among borrowers and lenders alike. The evolution we are seeing today reflects a more balanced and resilient credit environment. There is also a clear shift in how credit is being accessed and delivered, with digital innovation and wider distribution playing an increasingly important role in expanding reach across segments.

As the landscape continues to evolve, the focus for the industry will remain on maintaining quality growth through responsible lending practices, supported by robust data and analytics capabilities.”

Key Highlights:

Personal Loan shows steady growth in Mar’26, with sourcing volumes rising sharply and improving asset quality
AUM stood at Rs.16.1 lakh crore as of March 2026, up 15% YoY
New loan sourcing has remained robust during the year, showing 32% YoY growth
NBFCs continue to strengthen their market position, particularly in small ticket lending (PL ticket size <25K), highlighting their growing role in driving credit penetration across mass-market borrower segments
Asset quality improved YoY, with Net 30+ declining to 2.5% in Mar’26, signaling healthier portfolio performance

Gold Loans are emerging as a key driver of retail credit growth
AUM rose sharply by 47% YoY, to Rs.11.9 lakh crore as of March 2026, with improving asset quality
Sourcing of new loans witnessed strong growth trajectory through FY26, with 115% YoY growth in FY26 Q4, supported by rising gold prices and rising ticket sizes
NBFCs have emerged as the fastest growing lender category, overtaking Public Sector Banks in sourcing contribution in FY26 Q4
Trends indicate accelerated growth of new loans in northern states, indicating a rising borrower preference for asset-backed lending beyond traditional geographic dominance of Southern states of India

Credit Cards show moderate growth with shift towards higher ticket sizes and better portfolio
After some slowdown till December 2025, credit card AUM has witnessed a recovery in March 2026, showing 2% YoY growth with AUM at Rs.3.4 lakh crore
Sourcing of new cards showed some resurgence with 5% YoY growth, reflecting resilient consumer demand for revolving credit products
Rising average ticket sizes reflect a gradual shift towards higher-value customer acquisition across the industry

Consumer Durable loans exhibit high growth led by NBFCs with strong focus on low-ticket size lending
AUM stood at Rs.1.0 lakh crore as of March 2026, up 28% YoY and sourcing growth up by 25% YoY
NBFCs strengthened their dominance in this portfolio, gaining ~7% market share YoY in Y26 Q4, with increasing focus on lower ticket size lending
Asset quality improved sharply in March 2026, indicating strong repayment discipline among small ticket borrowers

Two-wheeler loans continue to show stable growth with gradual shift toward mid-ticket size segments
Stable expansion with 17% YoY growth and AUM at Rs. 1.8 lakh crore as of March 2026
Sourcing of new loans grew in FY26 Q4 with ticket size remaining stable at Rs. 1 lakh, indicating consistent borrower demand
NBFCs continued to dominate the segment, supported by strong dealer networks, faster turnaround, and deeper reach in mass-market customer segments.
Shift toward mid-ticket segment (Rs.1–2 lakh), showing preference for higher-value two-wheelers and improved financing availability

Home Loans indicate stable growth driven by rising ticket sizes
AUM stood at Rs. 43 lakh crores as of March 2026, up 12% YoY, showing steady portfolio expansion
While Q4 FY’26 sourcing moderated YoY, average ticket size increased from Rs. 31.6 lakh to Rs. 34.8 lakh, indicating a shift toward higher-value housing finance

Auto Loans are growing steadily with gradual shift toward higher-value loans
AUM stood at Rs. 9.2 lakh crore as of March 2026, up 15% YoY
Sourcing of new loans also showed18% YoY; growth in FY26 Q4; with gradually increasing average ticket sizes, reflecting growing consumer demand for premium value vehicles and higher auto financing requirements

Experian continues to be at the forefront of enabling India’s lending ecosystem with data-driven insights and advanced analytics. By leveraging its extensive data assets and technology capabilities, Experian supports lenders in making informed decisions, strengthening risk management frameworks, and driving responsible credit growth.

(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing.)

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