Formal retail credit access doubles over past decade

India’s formal retail credit footprint has expanded significantly over the past decade, with the share of consumers accessing credit at least once rising from 35% in March 2017 to 74% in March 2026. This growth came even as the credit-eligible population increased from 79 crore to 89 crore.

The rise was also marked by stronger credit engagement, with the share of active borrowers more than doubling from 11% to 28%, signalling deeper adoption of formal financial services. According to TransUnion CIBIL's latest report, consumption-led lending has emerged as the primary driver of this growth, with personal loans, credit cards and consumer durable loans becoming the dominant entry point into the credit system.

The composition of borrower portfolios has shifted materially, with the share of credit-active consumers holding consumption products rising from 34% in 2017 to 51% in 2026, while the number of such borrowers grew fourfold. This category now accounts for the largest share of borrower wallets.


"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," said Bhavesh Jain, MD and CEO of TransUnion CIBIL. "For younger borrowers, mobile phones rather than two-wheelers and vehicles appear to be products of choice," he said.

Credit growth has increasingly moved beyond traditional hubs in western and southern India, with northern and central states gaining a larger share of active borrowers. Uttar Pradesh’s share of the credit-active population rose from 8% in 2017 to 11% in 2026, while Madhya Pradesh and Bihar saw their shares increase from 4% to 6% and 3% to 5%, respectively. Meanwhile, Maharashtra and Tamil Nadu witnessed a decline in their share, though they continue to remain among India’s biggest credit markets.

First-time borrowers are now more likely to start with small-ticket unsecured loans rather than large asset-backed loans such as vehicles or housing. These loans are often used to finance electronics and consumer goods.

The borrower base also broadened across demographics,with increased share of women, younger borrowers under 35 years of age, and semi-urban and rural consumers, indicating wider dispersion of credit across regions and income segments.

(With inputs from Times of India)