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Digital Loans Boom: How 6.4 Crore Sanctions Fuel India's Credit Growth

Digital personal loans are absolutely booming in India. A new report shows a massive 6.4 crore loans were sanctioned in just the first half of this financial year. This growth is being driven by younger borrowers and improved risk management by lenders. The data clearly signals a healthy and expanding formal credit market for the country.

Key Points: Digital Personal Loans Hit Rs 97,381 Crore in H1 FY26 Report

  • 6.4 crore digital personal loans sanctioned in H1 FY26, making up 80% of all personal loan volumes
  • Sanctioned value surged to Rs 97,381 crore, up from Rs 78,084 crore in H1 FY25
  • Average ticket size rose to Rs 15,177, indicating a shift to higher-value lending
  • 60% of sanctioned value went to borrowers under 35, showing youth-driven credit demand
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Digital personal loans stay on positive trajectory in H1 FY26: Report

A FACE report reveals 6.4 crore digital personal loans worth Rs 97,381 crore were sanctioned in H1 FY26, driving India's formal credit expansion.

"The FinTech lending ecosystem is operating in sync with the public policy objective of digital financial inclusion for inclusive growth and resilience. - Sugandh Saxena, FACE CEO"

New Delhi, Dec 3

Digital non-banking financial companies (NBFCs) are now central to India's personal loan market, significantly contributing to the expansion of formal credit, and digital personal loans remain critical to the nation's credit landscape, a report said on Wednesday.

In the first half of the current financial year (H1 FY26), 6.4 crore digital personal loans, worth Rs 97,381 crore, were sanctioned, making up 80 per cent of all personal loan volumes and 19 per cent of sanction value.

"Meanwhile, the average sanctioned ticket size rose to Rs 15,177, compared to Rs 23,327 in the same period last year (H1 FY24 25)," RBI-recognised self-regulatory organisation, Fintech Association for Consumer Empowerment (FACE) said in its report.

Additionally, sanction volumes grew from 5.9 crore in H1 FY25 to 6.4 crore in H1 FY26, while sanctioned value increased from Rs 78,084 crore to Rs 97,381 crore, signalling stronger demand and improved underwriting quality.

"Ticket size growth indicates a shift toward higher value lending as borrowers build credit history and repayment performance continues to improve," the report noted.

At the same time, outstanding digital personal loan portfolios reached 5.99 crore accounts and Rs 1.28 lakh crore as of September, with portfolio quality improving to 2.1 per cent days past due (dpd) 90 plus.

FACE CEO Sugandh Saxena said: "The FinTech lending ecosystem is operating in sync with the public policy objective of digital financial inclusion for inclusive growth and resilience."

Access to formal, suitable, convenient, and safe digital credit options is critical to support individuals and the country's consumption and resilience. India's digital lending market is scaling sustainably on the foundation of customer-protection, prudence, and risk management, Saxena added.

Credit distribution continues to widen, with 60 per cent of sanctioned value from borrowers under 35 years, 17 per cent sanctioned to women, and 53 per cent originating from tier III and beyond, demonstrating sustained expansion of formal credit access into young and emerging segments, the report highlighted.

- IANS

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Reader Comments

P
Priya S
While the growth is impressive, we must remain cautious. The report mentions improved underwriting, but I know several young people in my office who have taken multiple small loans and are struggling with repayments. Financial literacy is key alongside access.
R
Rohit P
53% from Tier III and beyond! That's the real story here. Digital loans are reaching small towns where bank branches are scarce. This is how we build a truly inclusive economy. Jai Digital India! 🇮🇳
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Sarah B
The increase in average ticket size is interesting. Shows people are getting comfortable with the system and using it for bigger needs, not just small emergencies. Hopefully, the lower DPD 90+ figure means responsible borrowing is also increasing.
V
Vikram M
Good to see data from a recognised SRO like FACE. Gives more credibility. The focus on customer protection and risk management they mention is crucial. We don't want a bubble of bad debt. Slow and steady wins the race.
K
Kavya N
Only 17% sanctioned to women? That number needs to grow much faster. Access to easy credit can empower so many women entrepreneurs and homemakers managing household finances. Fintech companies should have targeted campaigns.

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