New Delhi, Oct 14
Digital non-banking financial companies (NBFCs) sanctioned 3 crore personal loans totalling Rs 43,019 crore in Q1 FY26, representing 80 per cent of personal loan volumes, a report said on Tuesday.
Further, the personal loans sanctioned by digital NBFCs accounted for 20 per cent of the sanction value, according to the data compiled by Fintech Association for Consumer Empowerment (FACE), a self-regulatory organisation in the fintech sector.
Their growing portfolio of Rs 1.2 lakh crore (June 2025) reflects growth underpinned by improving credit quality, the report said.
The report, based on data from credit bureau Crif High Mark, signalled that digital NBFCs are now central to India's personal loan market, significantly contributing to the expansion of formal credit and deepening inclusion.
This trend indicates a shift in India's lending ecosystem towards sustainable, high-quality growth. As of June, outstanding digital personal loans stood at Rs 1.20 lakh crore across 5.69 crore accounts, with portfolio stress maintained at 2.5 per cent of the portfolio remaining overdue for repayment for more than 90 days.
Over 61 per cent of loans were extended to borrowers under 35 years old, with a slow yet steady rise in female participation and continued penetration into markets beyond metros, reflecting inclusive growth aligned with India's financial inclusion priorities.
"The maturity of the market, strong customer preference for digital, and regulatory and self-regulatory rules continue to nurture the digital lending space," said Sugandh Saxena, CEO of FACE.
FACE reported that sanction volumes and values increased by 13 per cent and 17 per cent year-on-year (YoY) in Q1 FY26, almost half the growth rate in Q1 FY25.
Over 110 digital NBFCs now anchor India's digital lending ecosystem, serving nearly half of all active personal loan accounts.
The average loan size is Rs 14,270, with one in three loans under Rs 25,000, highlighting digital lending's focus on inclusion and flexibility.
— IANS
Reader Comments
While the growth is impressive, I'm concerned about the high concentration among younger borrowers. Many of my friends are taking multiple small loans and getting into debt traps. RBI should ensure proper credit assessment is happening.
Great to see more women participating in digital lending! As a small business owner in Jaipur, these small-ticket loans have been a lifesaver for managing inventory during peak seasons. Digital NBFCs understand our needs better than traditional banks.
The 2.5% NPA rate is quite impressive actually. Shows that digital lending with proper tech-based risk assessment works better than traditional methods. This is the future of Indian banking!
Working in fintech sector, I can confirm the growth is real but the slowing YoY growth rate (13% vs 25% last year) suggests market saturation might be setting in. Still, ₹1.2 lakh crore portfolio is massive achievement for digital lenders.
Average loan size of ₹14,270 shows these are truly serving the common man's needs. Whether it's medical emergency, education fees, or festival expenses - digital NBFCs are filling the gap that banks ignored for decades. Jai Digital India! ðŸ™
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