New Delhi, Dec 3 (NationPress) Digital non-banking financial companies (NBFCs) have become pivotal in India's personal loan sector, playing a significant role in the growth of formal credit. A report released on Wednesday highlighted that digital personal loans are essential to the country’s credit environment.

In the first half of the financial year 2026 (H1 FY26), a total of 6.4 crore digital personal loans were approved, amounting to Rs 97,381 crore, which constitutes 80 percent of all personal loan transactions and 19 percent of the total sanction value.

The report from the Fintech Association for Consumer Empowerment (FACE), a self-regulatory body recognized by the RBI, also noted an increase in the average sanctioned amount, which rose to Rs 15,177 from Rs 23,327 in the same period last year (H1 FY24 25).

Moreover, the volume of sanctioned loans increased from 5.9 crore in H1 FY25 to 6.4 crore in H1 FY26, with the sanctioned value rising from Rs 78,084 crore to Rs 97,381 crore. This indicates a growing demand and enhanced quality of underwriting.

The report emphasized that the growth in ticket sizes reflects a transition towards higher-value loans as borrowers enhance their credit profiles and repayment capabilities.

By September, the outstanding digital personal loan portfolio reached 5.99 crore accounts valued at Rs 1.28 lakh crore, with an improvement in portfolio quality to 2.1 percent days past due (dpd) 90 plus.

FACE CEO Sugandh Saxena stated, "The FinTech lending landscape is aligning with public policy goals aimed at promoting digital financial inclusion for equitable growth and resilience."

Access to formal, reliable, and safe digital credit options is crucial for supporting individual needs and enhancing the country’s economic resilience. According to Saxena, India's digital lending market is growing sustainably based on principles of customer protection, prudence, and thorough risk management.

The report also highlighted that credit distribution is broadening, with 60 percent of the sanctioned value going to borrowers under 35 years of age, 17 percent to women, and 53 percent originating from tier III cities and beyond. This shows a consistent increase in formal credit accessibility for younger and emerging demographics.