India's credit ecosystem is experiencing a significant shift in growth dynamics, with the compounded annual growth rate of credit-active consumers moderating from 14% during March 2017-March 2019 to 9% during March 2024-March 2026, according to TransUnion CIBIL. This transition from rapid expansion to a more deliberate growth phase requires lenders to adopt targeted strategies that balance accessibility with responsible lending practices. As reported by TransUnion CIBIL, credit-active consumers are defined as those who have at least one retail loan with balance or limit reported on the portfolio date. The moderation indicates that India is moving from a phase of broad-based credit expansion to one that requires more targeted strategies focused on sustainable and inclusive growth.
India's credit penetration has expanded dramatically, reaching nearly 74% of the eligible population as of March 2026, compared to 35% as at March-end 2017, according to TransUnion CIBIL's latest report. The number of credit eligible customers has increased substantially to 89 crore in March 2026 from 79 crore in March 2017. Notably, nearly three-fourths of India's population (74% as at March-end 2026 against 35% as at March-end 2017) has accessed credit at least once, with early growth primarily driven by expanding credit access. Despite this progress, credit penetration remains below 80% levels in developed markets such as the US and Canada, indicating significant headroom for continued growth.
A significant structural shift highlighted by the report is the rapid increase in credit-experienced borrowers, with their share jumping from 38% to 54% since 2017. Women emerged as another key driver of credit inclusion, with their share among credit-active consumers increasing from 22% in 2017 to 30% in 2026. Younger borrowers are playing a larger role in the credit ecosystem, with their share increasing from 33% to 39% during the period. Credit awareness has also improved substantially, with the proportion of consumers actively monitoring their credit profiles rising from 35% to 63%. The report notes that women borrowers are becoming increasingly digital, credit-aware and more deeply integrated into the formal financial system. Among the biggest findings, the share of consumers from semi-urban and rural regions (SURU) went up from 53% to 63%, while women with more than five years of retail credit experience increased from 29% to 43%.
A key development highlighting growth opportunities is the decline in new-to-credit (NTC) originations, which has decreased from 32% as at March-end 2017 to 13% as at March-end 2026, as reported by TransUnion CIBIL. This decline in NTC customers and MSMEs represents the next growth frontier as the market matures. The report emphasizes that growth is moderating and the path forward demands sharper focus on enabling responsible, sustainable and inclusive credit participation, with the increasing engagement of women, younger borrowers and consumers from semi-urban and rural markets reshaping the landscape. The study notes significant opportunity to bring more New-To-Credit (NTC) consumers as well as NTC commercial entities into the formal credit fold, with the proportion of credit-active consumers within the credit-eligible population increasing from 11% in March 2017 to 28% in March 2026.
In the commercial enterprise segment, the identified credit-eligible commercial entity base increased from 6.3 crore in March 2021 to 8.7 crore in March 2026, according to TransUnion CIBIL. However, the commercial credit landscape shows mixed trends, with ever credited enterprises declining to 41% from 50% and credit active enterprises dropping to 9% from 10% as of March 2026. NTC origination in the enterprise segment has also decreased to 39% from 60%, indicating a maturing market where existing enterprises are becoming more credit-active while new market entrants are fewer. The share of proprietorship and partnership-driven enterprises went up from 70% to 88%, low-risk entities rose from 13% to 37%, and credit-experienced entities increased from 30% to 40% between March 2021 and March 2026.
The report found that consumption-led borrowing has become increasingly dominant, with the share of borrowers holding consumption products such as personal loans, credit cards and consumer durable loans increasing from 34% in 2017 to 51% in 2026. Business-oriented credit recorded an even sharper increase, with the share of credit-active consumers holding these products rising from 3% to 9%, while their number grew tenfold – registering the fastest expansion among the categories studied. Gold loans also witnessed a strong resurgence, while vehicle loans and mortgage products remained stable. According to the report, borrowers are increasingly using credit not only for consumption but also for entrepreneurial and commercial activities. The report also highlighted a sharp improvement in the speed of credit delivery, with turnaround time from inquiry to loan origination declining significantly across borrower categories, as digital underwriting and faster approval processes become central to credit adoption. The report found that one in five microfinance borrowers now also has a retail credit relationship, reflecting a clear progression from basic credit access towards mainstream retail and business finance.
