India's non-banking finance companies have emerged as the main entry point into formal credit for millions of first-time borrowers, with new-to-credit customers sourced by NBFCs rising to 50% in June 2026 from 24% in June 2016, according to a TransUnion CIBIL-FIDC report released on the basis of data from about 2,000 NBFCs.
The shift is significant because it signals how the country's credit expansion has increasingly been shaped by lenders that operate outside the traditional banking system. NBFCs, long known for their reach in underserved and semi-urban markets, are now playing a central role in bringing first-time borrowers into the formal financial ecosystem. That trend has major implications for consumer finance, vehicle ownership, electric mobility adoption and the broader pace of credit deepening in India.
NBFCs Lead Credit Access
The report suggests that NBFCs have steadily widened their footprint among borrowers with no prior credit history, reflecting both stronger distribution networks and a lending model better suited to customers who may not yet qualify for bank credit. For many such borrowers, especially those seeking vehicle loans, two-wheeler finance or small-ticket personal credit, NBFCs often provide the first formal borrowing relationship.
This matters for the automotive and mobility sector because vehicle finance remains one of the most visible channels through which first-time borrowers enter the credit system. In India, access to affordable financing can determine whether a household buys a motorcycle, a scooter, a used car or, increasingly, an electric vehicle. As NBFCs expand their share of NTC customers, they are effectively shaping demand in the mass mobility market.
The rise from 24% to 50% over a decade also points to a structural change in lender composition. Banks remain central to India's financial system, but NBFCs have become more agile in serving borrowers with thin or no credit files, particularly in locations where branch banking is limited or underwriting needs to be more flexible. Their role has grown alongside digital lending tools, alternative data use and more granular risk assessment.
Mobility Finance Implications
For the automotive industry, the report offers a reminder that credit availability is as important as product innovation. Even as manufacturers push into electric vehicles and connected mobility, the pace of adoption in price-sensitive segments will depend heavily on financing access. NBFCs, by reaching first-time borrowers, are helping expand the customer base for entry-level vehicles and EVs that rely on monthly affordability rather than upfront purchase power.
The findings are also relevant for the used vehicle market, where NBFCs have traditionally been active and where first-time borrowers often begin their credit journey. A borrower who finances a first scooter or car through an NBFC may later graduate to larger-ticket loans, creating a pipeline of future customers for both lenders and automakers.
At the same time, the expansion of NTC lending raises questions about risk management. First-time borrowers typically have limited repayment histories, making portfolio quality more sensitive to economic cycles, employment conditions and interest-rate movements. The report's scale — covering roughly 2,000 NBFCs — suggests the trend is broad-based, but it also implies that lenders will need disciplined underwriting to sustain growth without compromising asset quality.
Credit Deepening Ahead
The latest data reinforces a larger story about India's financial formalisation. As more households and small businesses enter the credit system through NBFCs, the country gains a deeper and more diversified borrower base. That can support consumption, vehicle ownership and mobility upgrades, while also improving the long-term visibility of borrowers in the formal economy.
For policymakers and industry executives, the message is clear: NBFCs are no longer peripheral participants in retail lending. They are now central to the first step of India's credit journey. In sectors such as automotive and EVs, where financing often determines market size, their influence is likely to remain outsized.
The report does not merely capture a lending statistic. It captures a shift in how India buys mobility, who gets access to credit first, and which institutions are defining the next phase of financial inclusion.