India's formal retail credit penetration has achieved a landmark milestone, with the share of consumers accessing credit at least once rising from 35% in March 2017 to 74% in March 2026. According to The Economic Times and Mint, this dramatic expansion occurred despite the credit-eligible population growing from 79 crore to 89 crore during the same period. The growth 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. As reported by TransUnion CIBIL, 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 credit monitoring has jumped from 1% to 35% between March 2018 and March 2026, demonstrating increased credit awareness and accessibility across the population.
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. According to Mint, 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, with Banking Standard reporting that Maharashtra's share declined to 10% from 12% and Tamil Nadu fell to 9% from 11%. The borrower base broadened across demographics, with increased share of women, younger borrowers under 35 years of age, and semi-urban and rural consumers. As per Mint, women borrowers increased their share from 22% in March 2017 to 30% in March 2026, with semi-urban and rural credit-active women consumers going up to 64% in March 2026, compared to 57% in March 2017. Young borrowers rose from 33% to 39% in the same period, with young consumers from semi-urban and rural regions increasing their share from 47% to 61%.
The composition of borrower portfolios has undergone a fundamental transformation, with the share of credit-active consumers holding consumption products rising from 34% in 2017 to 51% in 2026. According to The Economic Times, this category now accounts for the largest share of borrower wallets, with the number of such borrowers growing fourfold. The housing loan share remains unchanged at 10%, while small business NTC share declined to 39% in FY26 from 60% in FY17. Notably, pre-Covid, two-wheeler loans were the biggest draw for individuals, while mobile phones have become the primary productivity tool driving credit demand. As TransUnion CIBIL's CEO Bhavesh Jain noted, repayment performance of the NTC category is on par with prime or near-prime borrowers, though individual lenders' risk appetite influences these decisions. The share of consumers from semi-urban and rural regions (SURU) went up from 53% to 63%, indicating wider dispersion of credit across regions and income segments.
The individual credit landscape shows remarkable growth in credit accessibility, with the number of ever-credited individuals growing to 74% from 35% and credit active individuals rising to 28% from 11% in the same period. According to The Economic Times, 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 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. As Jain explained, "Credit dispersion has travelled a long way thanks to consumption loans" and "For younger borrowers, mobile phones rather than two-wheelers and vehicles appear to be products of choice." The share of over-leveraged borrowers' originations increased from 5% in FY17 to 18% in FY24 before moderating to 15% in FY26, with higher leverage largely concentrated among high-momentum demographic groups such as younger consumers.
