NBFCs Eye Growth as Retail Credit Hits Rs 82 Trillion: Crisil
- Retail credit in India reached Rs 82 trillion in FY25, growing at a 15.1% CAGR since FY19, with continued growth projected at 14-16% CAGR till FY28.
- NBFCs are set to benefit from this surge, with opportunities to diversify funding and attract new investors as credit demand rises across housing, auto, personal loans, and credit cards.
- India’s low household credit-to-GDP ratio (42%) signals vast untapped potential, especially in underserved segments, supported by rising financial awareness and inclusion efforts.
India's retail credit market is witnessing a surge, creating significant opportunities for Non-Banking Financial Companies (NBFCs) to expand their investor base, according to a recent report by Crisil Intelligence. The report outlines the strong and sustained growth in the retail credit segment and predicts continued momentum in the coming years.
Crisil noted that rising demand and improving consumer sentiment are key drivers, enabling banks and NBFCs alike to diversify funding sources and attract a wider range of investors. The report emphasized that with more retail borrowers entering the credit ecosystem, NBFCs stand to benefit by tapping into new investor segments and reducing dependency on traditional funding channels.
As per the findings, India’s retail credit market stood at Rs 82 trillion in FY25, reflecting a robust compound annual growth rate (CAGR) of 15.1% between FY19 and FY25. The momentum is expected to continue, with projected growth at 14-16% CAGR between FY25 and FY28. The expansion is fueled by rising demand for products such as home loans, vehicle finance, gold loans, education loans, consumer durable financing, personal loans, credit cards, and microfinance.
In FY25 alone, the sector grew by 14%, driven by strong demand in housing and auto loans, along with a consumption-led spike in personal loans and credit card usage. These trends highlight the rising confidence among Indian consumers and increasing financial access.
Despite the growth, the report also highlighted a significant gap in credit penetration. As of calendar year 2024, India’s household credit-to-GDP ratio stood at 42%, considerably lower than China's 60%, the US’s 69%, and the UK’s 76%. Similarly, India's overall credit-to-GDP ratio was just 93%, compared to 138% for the UK and 198% for China, indicating ample room for expansion.
The report concluded that growing financial awareness, supportive government policies, and broader financial inclusion will continue to improve credit access, especially for underserved segments. As this transformation unfolds, retail credit is expected to remain at the forefront of India’s credit growth story-offering NBFCs and banks alike a fertile ground for scaling operations and broadening their reach.
