Are Digital NBFCs Dominating Personal Loan Volumes in Q1 FY26?
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Synopsis
Digital NBFCs have emerged as a driving force in India’s personal loan sector, accounting for a remarkable 80% of volumes in Q1 FY26. This report explores their impact on financial inclusion and market dynamics, highlighting a significant shift towards digital lending.
Key Takeaways
- Digital NBFCs accounted for 80% of personal loan volumes in Q1 FY26.
- They sanctioned 3 crore personal loans worth Rs 43,019 crore.
- Over 61% of loans went to borrowers under 35 years of age.
- The average loan size is Rs 14,270, with a focus on small loans.
- Portfolio stress remains low at 2.5% overdue for over 90 days.
New Delhi, Oct 14 (NationPress) In the first quarter of FY26, digital non-banking financial companies (NBFCs) have approved 3 crore personal loans amounting to Rs 43,019 crore, constituting an impressive 80 percent of the personal loan market, as per a report released on Tuesday.
Moreover, the personal loans granted by these digital NBFCs made up 20 percent of the total sanction value, according to data gathered by the Fintech Association for Consumer Empowerment (FACE), a self-regulatory body within the fintech industry.
Their expanding portfolio, valued at Rs 1.2 lakh crore as of June 2025, showcases growth driven by enhanced credit quality, the report highlighted.
Based on insights from the credit bureau Crif High Mark, the report indicated that digital NBFCs have become pivotal to India’s personal loan sector, playing a significant role in the advancement of formal credit and enhancing financial inclusion.
This progression points to a transformation in India’s lending landscape toward sustainable, high-quality growth. As of June, the total outstanding digital personal loans reached Rs 1.20 lakh crore across 5.69 crore accounts, with portfolio stress being maintained at 2.5 percent of the portfolio that has been overdue for more than 90 days.
More than 61 percent of the loans were issued to borrowers under the age of 35, illustrating a gradual yet positive increase in female participation and a continued outreach to non-metropolitan markets, demonstrating inclusive growth aligned with India’s financial inclusion goals.
“The maturation of the market, a strong customer inclination towards digital solutions, and the ongoing regulatory and self-regulatory frameworks are fostering the digital lending arena,” stated Sugandh Saxena, CEO of FACE.
FACE further reported a year-on-year (YoY) increase of 13 percent in sanction volumes and 17 percent in values for Q1 FY26, which is nearly half the growth rate compared to Q1 FY25.
Currently, over 110 digital NBFCs are integral to India’s digital lending landscape, catering to nearly half of all active personal loan accounts.
The average loan amount stands at Rs 14,270, with one-third of loans being under Rs 25,000, emphasizing the focus of digital lending on inclusion and flexibility.
Point of View
I firmly believe that the rise of digital NBFCs marks a pivotal moment for India's financial ecosystem. Their substantial contribution to personal loans not only enhances credit accessibility but also aligns with the nation’s broader goals of financial inclusion and sustainable growth. This is a trend we must watch closely.
NationPress
15/10/2025
Frequently Asked Questions
What percentage of personal loans are sanctioned by digital NBFCs?
Digital NBFCs sanctioned 80% of personal loan volumes in Q1 FY26.
How many personal loans did digital NBFCs approve?
They approved 3 crore personal loans totaling Rs 43,019 crore.
What is the average loan size from digital NBFCs?
The average loan size is Rs 14,270.
What age group is most commonly receiving loans?
Over 61% of loans were extended to borrowers under 35 years old.
What is the portfolio stress rate for digital loans?
The portfolio stress is maintained at 2.5% for loans overdue for more than 90 days.
