India's Lending Sector Sees 17% Growth in AUM Amid Improved Asset Quality

Key Takeaways

AUM in India's lending sector reached Rs 130 lakh crore .

17% year-on-year growth reported.

36% YoY growth in new credit sourcing in Q3 FY26.

Improvement in asset quality : overdue payments fell to 3.3% .

Secured loans grew by 42% in Q3 FY26.

New Delhi, Feb 26 (NationPress) The total assets under management (AUM) in India's lending sector reached Rs 130 lakh crore as of December 2025, marking a significant 17% year-on-year growth, according to a recent report.

The analysis from Experian, a data and technology firm, indicates that the credit sourcing for new loans in Q3 FY26 surged by 36% YoY, a notable increase from 7% the previous year. This growth is attributed to ongoing demand from both consumers and businesses.

Key insights from the report reveal a robust increase in lending activities, driven by enhanced sourcing, a rise in secured lending, and better asset quality metrics.

Notably, the asset quality improved as the percentage of payments overdue by 30 days or more decreased from 3.9% to 3.3% YoY.

Secured loans, encompassing gold, home, and vehicle loans, experienced an impressive 42% growth in Q3 FY26, compared to 20% the previous year. Gold loans were highlighted as a significant contributor, especially for small-ticket loans under Rs 3 lakh.

This trend reflects a growing preference among borrowers for asset-backed loans, alongside lenders' focus on secured credit.

Furthermore, home loans and auto loans exhibited steady growth, buoyed by consistent demand and enhanced affordability.

While there was a spike in demand for personal loans and consumer durable loans, influenced partly by festive expenditures, the issuance of credit cards has slowed down, indicating a more cautious approach to borrowing and lending in this sector.

“The lending landscape in India is witnessing strong momentum, fueled by stable demand, a rising inclination towards secured loans, and improved repayment behaviors. Financial products like gold loans and home loans are increasingly enabling borrowers to fulfill their financial needs sustainably,” stated Manish Jain, Country Managing Director of Experian India.

Public sector banks have bolstered their positions in the home and auto loan markets, while Non-Banking Financial Companies continue to perform well in consumer-focused areas such as durable loans and two-wheeler financing.

aar/pk

Point of View

The latest report on India's lending sector indicates a healthy growth trajectory. The increase in assets under management and improvement in asset quality reflects a robust demand for secured loans, marking a positive trend in the financial landscape.

NationPress

1 Jul 2026

Frequently Asked Questions

What is the current AUM of India's lending industry?

As of December 2025, India's lending industry's assets under management stand at Rs 130 lakh crore.

How much did credit sourcing grow in Q3 FY26?

Credit sourcing grew by 36% year-on-year in Q3 FY26.

What factors contributed to the growth in secured loans?

The growth in secured loans is driven by increased consumer demand and the lenders' focus on asset-backed borrowing.

What trends were observed in personal loans and credit cards?

While personal loans and consumer durable loans saw higher demand, the issuance of credit cards slowed down, indicating cautious borrowing.

What does the improvement in asset quality indicate?