NBFC Credit Growth Accelerates to 14.2% in May; Retail Loans Lead Surge

NBFC credit growth accelerates to 14.2% in May; retail loans major contributor

New Delhi, July 7

As per the release, while NBFC lending momentum remained healthy in May, growth was increasingly driven by retail and agriculture segments, even as credit expansion to industry and services lost some pace.

Credit to agriculture and allied activities recorded the sharpest growth, rising 17.9 per cent year-on-year in May 2026 reflecting stronger lending to the farm sector.

"Credit growth in agriculture and allied activities recorded a robust growth of 17.9 per cent (y-o-y) in May 2026 against 5.0 per cent a year ago," the release said.

At the same time, retail loans remained the biggest contributor to overall NBFC credit growth, expanding 19.5 per cent year-on-year against 14.9 per cent in May 2025.

"Retail loans contributed the most in overall credit growth by NBFCs with 19.5 per cent (y-o-y) growth in May 2026," it said.

Within the retail segment, housing loans, vehicle loans and loans against gold jewellery registered robust growth, indicating sustained consumer demand across key loan categories.

In contrast, credit growth to industry moderated to 7.3 per cent in May 2026 from 10 per cent a year ago. The slowdown was primarily attributed to weaker growth in lending to infrastructure, which constitutes a significant share of industrial credit.

Credit to the services sector also witnessed moderation, growing 16.7 per cent year-on-year compared with 23.9 per cent in May 2025.

Despite the overall slowdown, lending to the commercial real estate segment continued to record strong expansion, making it one of the key contributors within the services category.

"Credit growth in services sector moderated to 16.7 per cent (y-o-y) in May 2026 against 23.9 per cent a year ago. Among major contributors, growth (y-o-y) in credit to 'Commercial Real Estate' marked buoyant expansion," the release said.

— ANI