* Credit growth is being driven by women, younger borrowers and non-metro regions with growth in Uttar Pradesh, Madhya Pradesh, Bihar outpacing that of traditional strongholds of the west and south
* Study shows significant opportunity to bring more New-To-Credit (NTC) consumers as well as NTC commercial entities into the formal credit fold
India’s formal credit footprint has expanded significantly over the past nine years reveals TransUnion CIBIL’s new report, Unlocking Access: Journey of Credit Expansion in India. The report presents a study from March 2017 to March 2026 on how formal credit access has widened and how participation within the ecosystem has deepened through greater demographic diversity and credit awareness.
India’s credit-eligible[2] population increased from 79 crore in 2017 to 89 crore consumers in 2026. Of this group, the share of ever-credited[3] consumers, i.e., those who have accessed retail credit at least once, more than doubled from 35% in March 2017 to 74% in March 2026, demonstrating the wide progress and penetration of formal credit in India in the last few years.
The proportion of credit-active[4] consumers within the credit-eligible[5] population also increased during this period, from 11% in March 2017 to 28% in March 2026. However, the compounded annual growth rate of the credit-active consumer base moderated from 14% during the March 2017–March 2019 period to 9% during March 2024–March 2026 period. At the same time, the share of New-to-Credit (NTC) consumers in retail originations declined from 32% in March 2017 quarter to 13% in the March 2026 quarter. These numbers indicate significant opportunity to both deepen engagement with those already within the credit fold, and to bring new consumers into the formal credit ecosystem.
Mr. Bhavesh Jain, MD and CEO, TransUnion CIBIL, said, “The past decade has been a defining one for India’s credit ecosystem. In the 2016-17 period, the country saw momentous changes in the form of demonetization, the introduction of GST and the rapid adoption of Unified Payment Interface (UPI). Over the course of the decade, regulators, banks and lenders, NBFCs, fintechs, Credit Information Companies, technological advances and the digital public infrastructure collectively expanded pathways to credit. The COVID-19 pandemic accelerated adoption of digital tools. Cumulatively, these developments are believed to have contributed to increased access to credit and financial inclusion, while enabling lenders to make more informed and timely credit decisions.”
Borrower Wallets Shift Towards Lifestyle-Driven and Entrepreneurial Credit
The deepening of borrower engagement was accompanied by a marked change in the composition of credit wallets, with consumers showing a clear preference for consumption and entrepreneurial credit.
Consumption credit[6], comprising personal loans, credit cards and consumer durable loans, emerged as the most widely held category. The share of credit-active consumers holding consumption products increased from 34% in March 2017 to 51% in March 2026, while the number of consumers holding these products grew fourfold in the same period.
Business-oriented credit[7] recorded an even sharper increase, with the share of credit-active consumers holding these products rising from 3% to 9%, while their number grew tenfold – registering the fastest expansion among the categories studied. In comparison, while gold loan[8] participation increased from 19% to 22%, growth in vehicle loans[9] and mortgage products[10] remained stable.
Mr. Jain added, “The changes in wallet composition point to how credit is being increasingly seen as a means to drive a lifestyle-driven approach today, compared to the asset-based approach seen a decade ago. Credit dispersion has travelled a long way thanks to consumption loans. At the same time, the sharp increase in business loans by individuals points to increased use of credit by individuals for entrepreneurial activity. This creates a great opportunity for lenders to take a holistic view of individual proprietors and their business together as part of their lending strategies.”
A More Diverse Borrower Base Expands Credit Participation
The widening of formal credit access was accompanied by a change in the composition of India’s credit-active population. Women borrowers increased their share from 22% in March 2017 to 30% in March 2026, while that of young borrowers[11] rose from 33% to 39% in the same period. The share of consumers from semi-urban and rural regions (SURU) went up from 53% to 63%.
Within these expanding segments, younger consumers from semi-urban and rural regions in particular increased their share from 47% to 61%. Among women, the share with more than five years of retail credit experience increased from 29% to 43%, while semi-urban and rural credit-active women consumers went up to 64% in March 2026, compared to 57% in March 2017.
As credit participation widened, the share of over-leveraged borrowers[12] originations increased from 5% in FY 2017 to 18% in FY 2024 before moderating to 15% in FY 2026. The study noted that industry action helped stem the increase over the last two years. Higher leverage was largely concentrated among high-momentum demographic groups such as younger consumers.
While expansion of the borrower base has led to wide credit penetration in the last nine years, rise in credit awareness has added depth to the credit landscape. From nearly non-existent credit monitoring in March 2018, the proportion of credit-active consumers who monitor their credit saw a big jump to 35% in March 2026[13]. The share of credit-experienced consumers[14], i.e., those with a longer credit history, increased from 38% to 54%.
Among the biggest findings of the study is the changing geographic credit inclusion map of India. A state-wise analysis of credit uptake reveals that growth in northern and central India has outpaced that of western and southern India between 2017 and 2026. Maharashtra and Tamil Nadu, seen as traditional strongholds of credit uptake, remained among the country’s largest credit markets, although their respective shares moderated from 12% to 10% and from 11% to 9%. On the other hand, Uttar Pradesh increased its contribution from 8% in March 2017 to 11% in March 2026, Madhya Pradesh rose from 4% to 6%, Bihar from 3% to 5%, and West Bengal from 4% to 5%.
“Two factors have led to the strong growth of credit in India in the last decade – greater demographic diversity and credit awareness. The former has enabled expansion of the borrower base by bringing in newer demographic segments into the credit fold. The latter has added depth by allowing consumers to remain there and use credit as a means to fulfil life goals. Women are clearly becoming more financially aware, engaged, and driving sustainable inclusion. Thanks to digitization and heightened credit awareness, credit maturity among women borrowers has been impressive. For younger borrowers, mobile phones rather than two-wheelers and vehicles appear to be products of choice, as this mobile phone-native generation sees them as productivity tools.
“What also stands out is how India’s state-wise credit heatmap has undergone a gradual but clear shift. While the traditionally dominant states in west and south India continue their strong credit uptake, states in north and central India have seen a remarkable rise in credit participation. Our aspiration of Viksit Bharat depends in large measure on such a pan-India balance in credit growth, with more and more consumers moving from informal to formal credit”, Mr. Jain explained.
Expansion in Commercial Borrower Base Creates Further Headroom for Growth
Moving from consumer to commercial, the identified credit-eligible commercial entity base increased from 6.3 crore in March 2021 to 8.7 crore in March 2026. In the same period, the share of proprietorship and partnership-driven enterprises went up from 70% to 88%, low-risk entities[15] rose from 13% to 37% and credit-experienced entities[16] from 30% to 40%.
However, the share of entities that have accessed commercial credit declined from 50% to 41%, the credit-active share dipped from 10% to 9% and NTC also went down from 60% to 39% between quarter ended March 2021 and quarter ended March 2026. This indicates further capacity to bring eligible enterprises and medium, small and micro entrepreneurs into formal credit.
Mr. Jain added, “There are some big positives in the commercial story. The rise in proprietorships and partnerships indicates that individuals are now taking more business loans which in turn means increasing credit penetration at the grassroots level. The increase in the number of entities rated as low-risk points to the success of credit guarantee schemes in supporting borrowers. At the same time, the overall numbers suggest that the wide expansion in the MSME borrower base in the last five years has led to significant opportunity to onboard more commercial entities, especially those that are NTC, and to deepen engagement.”
“In essence, what this long-view study of India’s credit growth tells us is that the last decade was a defining one for the country. The last decade is the one in which India’s credit ecosystem came of age. If, at the start of this decade, the credit landscape was fragmented and collateral-led, then by the end of the decade, it had become diversified, data-driven, digitally enabled, and increasingly disciplined. As credit penetration and credit awareness deepened, the central question for many borrowers moved from ‘Can I access credit?’ to ‘How far can credit take me?’
“Looking ahead, there may be significant opportunities to build further on this strong period of credit expansion. By extending engagement with credit-active consumers, and tapping into new-to-credit consumers and commercial entities, our credit ecosystem can ensure balance between scale and quality of credit participation as we continue our journey of a credit-fit India” Mr. Jain concluded.
About TransUnion CIBIL
India’s pioneer credit information company, TransUnion CIBIL, ensures the credit history of each person and business entity is reliably represented.
We have developed technology and innovative solutions across core credit, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences, and personal empowerment for millions of people and MSMEs in India.
We serve the financial sector as well as commercial entities and individual consumers. Our customers in India include banks, credit institutions, NBFCs, housing finance companies, microfinance companies, telecom companies and insurance firms.
For more information visit www.transunioncibil.com
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