Formal retail credit access doubles over past decade
India's formal retail credit penetration has more than doubled over the last decade, rising from 35% to 74% of the credit-eligible population. This growth is primarily driven by consumption-led lending, such as personal loans and credit cards, rather than traditional asset-backed financing.
Why it matters
The shift indicates a fundamental change in Indian consumer behavior toward lifestyle-driven credit, signaling deeper financial inclusion and a broader, more geographically diverse borrower base.
MUMBAI: India's formal retail credit penetration more than doubled over the past decade, with the share of consumers who accessed credit at least once rising from 35% in March 2017 to 74% in March 2026, even as the credit-eligible population expanded from 79 crore to 89 crore.The expansion was accompanied by a sharp rise in engagement, with the proportion of credit-active consumers increasing from 11% to 28%, indicating deeper participation in formal finance. 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.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in