Retail Credit Surges as NBFCs Deploy Funds; Agriculture and Housing Loans Drive 14.2% Sectoral Growth
Non-Banking Financial Companies (NBFCs), including housing finance companies (HFCs), are witnessing a robust expansion in their credit deployment, according to provisional data released by the Reserve Bank of India (RBI) for May 2026. The overall credit registered by NBFCs saw a strong year-on-year growth of 14.2 per cent in May 2026, significantly outpacing the 11.4 per cent growth recorded one year prior.This sustained growth is being propelled primarily by the retail lending segment, which has maintained high momentum across various consumer categories. The RBI data highlights specific sectoral performances, showing mixed but generally positive trends across agriculture, industry, and services sectors.
Retail Loans Lead Credit Surge for NBFCs
The retail loan portfolio contributed the most to the impressive overall credit increase among NBFCs. These loans registered a healthy growth of 19.5 per cent year-on-year in May 2026, up from 14.9 per cent over the previous year.Within this vital segment, several specific lending categories displayed robust expansion. Housing loans, vehicle loans, and loans against gold jewellery all showed significant growth during May 2026. This indicates heightened consumer demand across housing purchases and asset financing among NBFC clients.
Agriculture Sector Shows Robust Growth
The agriculture sector and related activities demonstrated remarkably strong performance in credit deployment by NBFCs. Credit directed towards these primary sectors recorded a robust increase of 17.9 per cent year-on-year in May 2026. This figure represents a sharp improvement from the 5.0 per cent growth observed in the same period last year.Industry Sector Experiences Moderate Expansion
The industry sector saw an expansion in credit deployment, though at a moderated pace compared to previous periods. Credit growth for industry stood at 7.3 per cent year-on-year in May 2026. This compares against a 10.0 per cent growth recorded during May 2025.The moderation observed within the industrial lending segment was principally attributed to subdued growth in infrastructure financing, which remains a major constituent of this sector.
Services Sector Growth is Moderating
Credit deployed in the services sector exhibited a moderating trend in May 2026. The growth rate stood at 16.7 per cent year-on-year, down from 23.9 per cent recorded a year ago.Despite this moderation, the services sector still contributed substantially to overall NBFC credit expansion. Notably, credit provided for Commercial Real Estate showed buoyant expansion within the service lending category.
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