Digital NBFC loan book hits Rs 1.54 trn, up 28% in a year: Report | Personal Finance

The digital personal loan market expanded in the first quarter of 2026-27, but volume growth moderated even as the value of loans rose sharply. The outstanding portfolio of digital personal loans stood at Rs 1.54 trillion at the end of June 2026, up about 28 per cent from a year earlier, while loans overdue by more than 90 days remained at 1.4 per cent.

 

These are among the key findings of a report by the Fintech Association for Consumer Empowerment (FACE), based on CRIF High Mark data covering more than 110 digital non-banking financial companies (NBFCs) between April 2022 and June 2026.

  

Digital lenders account for 70% of loan volume

Digital NBFCs sanctioned 34 million personal loans worth Rs 646.56 billion in Q1 FY27. This represented 70 per cent of the total number of personal loans sanctioned during the quarter, although their share by value was much lower at 22 per cent.

 

The difference reflects the relatively small size of digital loans. The average ticket size was Rs 18,802, compared with Rs 70,025 for other NBFCs and Rs 4.52 lakh for banks. Across the entire personal loan market, 49 million loans worth Rs 2.99 trillion were sanctioned during the quarter.

 

The digital loan book is nevertheless moving towards larger ticket sizes. The average ticket size rose about 15 per cent from FY26 to Rs 18,802 in Q1 FY27. Loans of more than Rs 50,000 accounted for about 59 per cent of the sanction value, while loans below Rs 25,000 accounted for 29 per cent.

 

Loan growth is shifting from volume to value

Sanction volumes grew 14 per cent year-on-year in Q1 FY27 and 2 per cent from the previous quarter. In contrast, the value of sanctions increased 50 per cent from Q1 FY26 and 4 per cent sequentially to Rs 646.56 billion.

 

This suggests that growth is increasingly supported by larger loans rather than simply a higher number of small-ticket loans.

 

The borrower profile is also changing. Around 61 per cent of sanction value came from customers with more than five years of credit bureau history. The report also shows that 66 per cent of sanction value went to borrowers in the low-risk to medium-risk categories, although the exact distribution varies by credit-score band.

 

Young borrowers remain a major customer base

Digital lenders continue to have a younger customer base than banks and other NBFCs. About 58 per cent of sanction value went to borrowers below 35 years in Q1 FY27. Borrowers aged 26-35 alone accounted for 44 per cent, while those below 25 accounted for another 14 per cent.

 

The market is also geographically dispersed. About 40 per cent of sanction value went to Tier-III cities and beyond. Urban customers accounted for 51 per cent, while rural and semi-urban customers accounted for 38 per cent and 11 per cent, respectively. FACE warns that its rural-urban classification uses the 2011 Census and may not fully capture subsequent urbanisation.

 

Women, however, accounted for only 18 per cent of sanction value. This was broadly similar to other NBFCs and banks, indicating that the gender gap in formal borrowing remains significant.

 

Portfolio quality improves

The expansion in the loan book has not been accompanied by a deterioration in the reported 90-plus days past due (DPD) ratio. DPD 90+ fell from 2.9 per cent in March 2024 to 1.4 per cent by June 2026. The measure covers loans outstanding between 90 and 180 days past due as a share of loans outstanding up to 180 days.

 

As of June 2026, digital NBFCs had 56 million outstanding loan accounts worth Rs 1.54 trillion. Their outstanding portfolio accounted for 44 per cent of the number of personal loan accounts across digital NBFCs, other NBFCs and banks, but only 9 per cent of the outstanding value. Banks continued to dominate by value, with Rs 12.21trillion outstanding.

 

The figures indicate that digital NBFCs are becoming a significant channel for small-ticket personal credit, particularly among younger borrowers and customers outside the largest cities. At the same time, the sharp rise in the value of sanctions and the loan book means the quality of underwriting and borrower repayment behaviour will remain important as ticket sizes increase.

 

FACE said the ability of digital NBFCs to serve different customer segments can help expand formal credit, but stressed that responsible lending, transparency and customer interest need to remain central to growth.