India's credit market sees strong growth in FY26, asset quality improves: Report
New Delhi, May 27
India's credit market recorded strong growth in FY26, driven by rising loan demand, expansion in secured lending and improvement in asset quality, according to a report released by Experian.
The report said total loan sourcing rose 31 per cent year-on-year to Rs 75 lakh crore in FY26, while overall industry Assets Under Management (AUM) increased 19 per cent to Rs 137 lakh crore as of March 2026.
According to the report, the growth reflects "robust credit demand across retail consumer segments, supported by greater borrower confidence and improved underwriting discipline."
A major trend highlighted in the report is the growing share of secured lending, led by gold loans, home loans and other asset-backed products. The report noted that "gold loans continue to play a key role in expanding formal access to new credit borrowers, supported by faster onboarding and simplified underwriting."
At the same time, unsecured lending also rebounded strongly in FY26 after a slowdown in FY25, particularly in personal loans and consumer finance products.
The report said personal lending has seen strong traction in Tier 2, 3 and 4 cities due to "deeper digital penetration and expanding lender outreach, particularly through Fintechs."
Asset quality across the industry also improved during the year. Net 30+ delinquencies declined to around 3 per cent in March 2026 from higher levels a year ago, reflecting "stronger underwriting, improved repayment behaviour, and disciplined lending practices."
Among segments, gold loans recorded the sharpest rise, with AUM growing 47 per cent year-on-year to Rs 11.9 lakh crore, while home loan AUM stood at Rs 43 lakh crore, up 12 per cent. Personal loans grew 15 per cent to Rs 16.1 lakh crore, supported by a 32 per cent rise in new loan sourcing.
The report also noted that NBFCs and fintechs continued to drive growth in retail lending through faster onboarding and wider reach across borrower segments.
— ANI
Reader Comments
Impressive numbers! The rise in gold loan AUM by 47% shows how Indians are leveraging their family heirlooms for productive credit. Hope regulators keep a close eye on fintechs in Tier 2-4 cities to avoid a repeat of the 2008 subprime mess. Good growth story overall. 👍
The improvement in asset quality is the most reassuring part. 30+ delinquency down to 3% is a big improvement from a year ago. But I wonder how many of these new borrowers in smaller cities actually understand loan terms. Digital penetration is great, but we need proper education too. 😊
As someone working in a tier-3 city, I see the fintech boom firsthand. People are getting personal loans easily, but the interest rates are often hidden. 32% rise in new loan sourcing for personal loans is both exciting and worrying. Hope the report's 'stronger underwriting' claim holds true. 🤔
Great to see India's credit market maturing. The 19% AUM growth to Rs 137 lakh crore is impressive, but what about inflation? Loans are growing fast, but are we creating enough productive assets? Home loans at Rs 43 lakh crore is a good sign for the real estate sector. 🏠
The gold loan growth is understandable - many families have gold as their only collateral. But I'm concerned about unsecured lending in smaller cities. The digital penetration is helping, but we need more consumer protection. Responsible lending should be the priority, not just growth numbers. 🤗
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