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Digital NBFC Personal Loans to Hit Rs 3.6 Lakh Crore by FY30, Growing 26%

Digital non-banking finance companies are projected to see their personal loan book grow to over Rs 3.6 lakh crore by FY30, representing a compound annual growth rate of 26-28%. This strong growth is fueled by increasing digital adoption, expansion into new borrower segments, and a supportive regulatory environment. Asset quality has shown improvement, with gross NPAs declining, supported by recoveries and stringent underwriting, though the sector remains volume-heavy with higher credit costs. While banks still hold the largest share of personal loans by value, their share is gradually declining as digital NBFCs, backed by institutional capital, intensify competition.

Key Points: Digital NBFC Personal Loan Book to Grow 26% to Rs 3.6 Lakh Cr

  • Portfolio to exceed Rs 3.6 lakh crore by FY30
  • 26-28% CAGR growth forecast FY25-FY30
  • Gross NPAs improved to 2.1% from 3.3%
  • High-risk, high-yield nature with NIM of 8-12%
2 min read

Digital NBFC personal loan book to grow 26 pc to over Rs. 3.6 lakh crore by FY30

Digital NBFC personal loan portfolios projected to exceed Rs 3.6 lakh crore by FY30, driven by digital penetration and supportive regulations.

"Asset quality of Digital NBFCs is expected to remain range-bound supported by their growing focus on strengthening credit underwriting policies - Kalpesh Mantri"

New Delhi, March 30

Digital non‑banking finance companies' personal loan portfolios are expected to exceed Rs. 3.6 lakh crore by FY30, implying a compound annual growth rate of 26-28 per cent during FY25-FY30, a report said on Monday.

The report from ratings agency CareEdge Ratings said that the strong growth is driven by increasing digital penetration, expanding borrower segments and a supportive regulatory framework.

Outstanding personal loans of digital NBFCs more than doubled to Rs. 1.3 lakh crore as of September 2025 from Rs. 0.6 lakh crore in March 2023, the report cited Fintech Association for Consumer Empowerment (FACE) data.

Digital NBFCs witnessed a modest uptick in average ticket size from Rs. 12,967 in FY23 to Rs 15,177 in H1FY26.

Gross non‑performing assets fell to 2.1 per cent by September 2025 from 3.3 per cent in FY23 reflecting an improvement in asset quality driven by recoveries, write‑offs and stringent underwriting.

Further, profitability of major digital NBFCs continues to remain range bound, with return on assets (ROA) ranging between 1 per cent to 4 per cent, reflecting the high-risk, high-yield nature of small-ticket, unsecured loan portfolios.

Profitability analysis also showed that digital NBFCs have a net interest margin of 8 per cent-12 per cent.

"This highlights the high-risk, high-yield nature of their small-ticket, unsecured loan portfolios and efficient digital distribution models. Digital NBFCs write off their NPAs periodically, leading to high credit cost. However, digital NBFCs have strong capital adequacy, backed by patient capital from institutional investors," it noted.

Digital NBFCs remain volume-heavy, serving riskier customer segments but face higher credit costs and regulatory scrutiny, while traditional NBFCs maintain steadier growth through larger-ticket lending and diversified books.

"Asset quality of Digital NBFCs is expected to remain range-bound supported by their growing focus on strengthening credit underwriting policies and write-offs of NPAs periodically," said Kalpesh Mantri, Assistant Director - CareEdge Research.

Further, aided by continued funding support from institutional and venture investors Digital NBFCs' capital adequacy is expected to remain strong, Mantri added.

Banks continue to account for the highest share of the personal loan portfolio in terms of value, supported by their focus on prime customers and higher ticket sizes. However, their share has been gradually declining, indicating increasing competitive intensity, the report noted.

- IANS

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Reader Comments

A
Arjun K
Fantastic news for financial inclusion! Many of us in tier-2/3 cities who were ignored by traditional banks now have access to credit for emergencies or to start a small side business. The drop in NPAs shows the digital underwriting is working. Jai Digital India! 🇮🇳
R
Rohit P
Rs. 3.6 lakh crore is a massive number. But the average ticket size is still around 15k? That means they are giving loans to *a lot* of people. Hope the "stringent underwriting" is real and not just approving everyone. Debt traps are a real problem.
K
Karthik V
As someone who works in fintech, this growth is expected. The key takeaway is the strong capital adequacy from institutional investors. It means the sector is maturing, not just a wild west anymore. The competition with banks is healthy for the customer.
S
Sarah B
Interesting to see the NPA reduction. Writing off bad loans periodically to keep the books clean is a standard practice, but it doesn't mean the risk disappears. Consumers need to be financially literate and understand the terms, especially the high interest rates (8-12% NIM is steep).
M
Meera T
My brother took a small digital loan for his mobile repair shop. Process was smooth and fast. Traditional bank would have taken weeks. For micro-entrepreneurs, this speed and access is everything. Hope the regulatory framework stays supportive without stifling innovation.

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