Digital NBFCs Drive Financial Inclusion with 9.9 Crore Loans in FY26, Says FACE Report
Digital Personal Loans Dominate Volume Growth in India’s Credit Market
New Delhi, March 24: Digital non-banking finance companies have significantly expanded access to formal credit in India, sanctioning nearly 10 crore personal loans during the first three quarters of FY26, according to a report released on Tuesday.The report by the Fintech Association for Consumer Empowerment (FACE) highlighted that around 9.9 crore digital personal loans were sanctioned during this period, with total disbursements reaching Rs 1,53,260 crore.
Digital personal loans accounted for 78 per cent of the total volume of personal loans, while contributing 19 per cent to the overall sanction value, reflecting their dominance in smaller ticket-size lending.
Average Loan Size Rises, Signalling Market Evolution
The average sanction value of digital personal loans rose to Rs 15,493, marking an increase of about 18 per cent compared to FY25. The report noted that sanction values grew by 53 per cent year-on-year in the third quarter of FY25-26, largely driven by an increase in loan sizes.Despite this growth, digital loans remain significantly smaller than traditional lending benchmarks. The average loan size for NBFCs stands at around Rs 1 lakh, while banks average close to Rs 5 lakh per loan.
Portfolio Growth and Improving Asset Quality
The report, based on data from credit bureau CRIF High Mark covering over 110 digital NBFCs, showed that outstanding digital personal loan portfolios reached 6.47 crore accounts as of December 2025. The total portfolio value stood at Rs 1.39 lakh crore, registering an increase of approximately 53 per cent compared to March 2024.Asset quality also improved during the period. Loans with Days Past Due exceeding 90 days declined to 1.9 per cent in December 2025, down from 3.3 per cent in March 2023, indicating strengthening portfolio performance.
Younger Borrowers and Tier 3 Cities Lead Credit Uptake
Credit distribution trends continued to reflect the sector’s focus on underserved and emerging segments. Around 60 per cent of the sanction value was extended to borrowers under the age of 35. Women accounted for 18 per cent of the total sanction value, while 39 per cent of loans were disbursed to customers in tier 3 cities and beyond.According to FACE, these trends underline the growing reach of digital lending platforms in expanding formal credit access among younger populations and underserved regions, reinforcing their role in supporting inclusive and resilient economic growth.
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