India’s retail credit market witnessed strong momentum in FY26, driven by rising demand for gold loans, personal loans and home loans, according to Experian’s latest Industry Insights – May 2026 report.
The report highlights robust growth in loan originations, increasing preference for secured lending and improving repayment behaviour, indicating a healthier and more stable credit environment.
Retail credit AUM climbs to ₹137 lakh crore
India’s total retail credit Assets Under Management (AUM) reached ₹137 lakh crore as of March 2026, registering a 19% year-on-year growth.
New loan sourcing grew even faster, rising 31% year-on-year to ₹75 lakh crore during FY26, reflecting strong consumer appetite for credit across segments.
The report noted that broad-based demand from both urban and emerging markets continued to support growth in the lending ecosystem.
Secured lending gains momentum
Secured lending remained a key growth driver during the year, led by gold loans, home loans and other asset-backed credit products.
The trend suggests that lenders are increasingly focusing on lower-risk lending segments, while borrowers are showing a greater preference for secured credit options.
Gold loans, in particular, continued to play an important role in expanding access to formal credit by bringing first-time borrowers into the financial system.
According to the report, faster approvals and simplified lending processes have supported the rapid adoption of gold loans among consumers seeking funds for household and business requirements.
Personal loans stage a strong comeback
Unsecured lending rebounded strongly during FY26 after experiencing moderation in the previous year. Personal loans and consumer finance products emerged as the key growth engines within the unsecured lending segment, reflecting improving consumer confidence and spending appetite.
The report highlighted that personal loan demand continued to expand across Tier 2, Tier 3 and Tier 4 cities, supported by increasing digital adoption and wider distribution networks established by lenders.
Fintech companies played a significant role in driving this expansion by improving access to credit in underserved markets.
Repayment behaviour improves
The report also pointed to improving asset quality across the retail lending sector. Net 30 delinquencies improved to around 3% in March 2026, indicating healthier repayment trends and stronger underwriting practices across the industry.
The improvement suggests that lenders have become more disciplined in credit assessment while borrowers are demonstrating better repayment behaviour.
NBFCs, fintechs and banks fuel growth
Non-banking financial companies (NBFCs) and fintech lenders continued to expand their presence in unsecured and consumption-driven lending categories.
At the same time, public sector banks strengthened their position in secured lending segments, particularly home loans and priority-sector lending.
The report noted that the combined efforts of banks, NBFCs and fintech players are helping deepen credit penetration across the country.