India's non-banking finance companies have become a central gateway to formal credit for millions of first-time borrowers, with new-to-credit customers sourced through NBFCs rising to 50% in June 2026 from 24% in June 2016, according to a TransUnion CIBIL-FIDC report. The findings, drawn from a broad sample of about 2,000 NBFCs, point to a decade-long structural shift in how households and small businesses access credit, especially outside the traditional banking channel.
NBFCs Expand Reach
The report highlights how NBFCs have steadily deepened their footprint in segments that banks often find harder to serve at scale. These include borrowers with limited or no prior credit history, customers in smaller cities and semi-urban markets, and households seeking financing for vehicles, mobility assets and other consumption-linked needs. In practical terms, the rise in new-to-credit borrowers suggests that NBFCs are no longer merely filling gaps left by banks; they are increasingly shaping the first formal borrowing experience for a large share of India's credit entrants.
For the automotive and mobility sector, the trend is especially significant. Vehicle finance has long been one of the most visible entry points into formal credit, and NBFCs have played a critical role in financing two-wheelers, passenger vehicles and commercial mobility assets. As India's vehicle ownership base expands and electric mobility adoption gradually broadens, the ability of NBFCs to underwrite first-time borrowers will remain central to demand generation. The report's findings indicate that credit access is becoming more distributed, with NBFCs acting as an important bridge between informal financial behavior and the formal lending ecosystem.
Credit Access Shifts
The increase from 24% to 50% over ten years also reflects broader changes in India's lending landscape. Credit bureaus, digital underwriting tools and improved data availability have made it easier for lenders to assess borrowers with thin files or no prior bureau history. At the same time, NBFCs have built business models around speed, distribution and customer segments that are often underserved by mainstream banks. This has allowed them to scale lending to first-time borrowers while maintaining a strong presence in retail and asset-backed finance.
The report's scale matters. A sample of roughly 2,000 NBFCs provides a meaningful view of the sector's role in the credit market, especially because NBFCs operate across a wide range of geographies and borrower profiles. Their growing share of new-to-credit customers suggests that India's formal credit expansion is being driven not only by higher loan volumes, but by a widening of the borrower base itself. That is a crucial indicator for financial inclusion, even as it raises questions about underwriting discipline, portfolio quality and the sustainability of growth.
For lenders, the challenge is to balance inclusion with risk management. First-time borrowers often have limited repayment histories, making them more vulnerable to income shocks and more difficult to score accurately. As NBFCs continue to expand into this segment, the quality of data, collection practices and product design will be critical. The sector's ability to convert first-time borrowers into long-term, creditworthy customers will determine whether this expansion becomes a durable engine of financial deepening or a source of future stress.
Mobility Finance Outlook
In the context of automotive and EV financing, the report reinforces the importance of NBFCs in supporting mobility demand across income segments. Two-wheeler and entry-level vehicle purchases often depend on accessible financing, and that dependency is likely to persist as consumers weigh affordability, operating costs and the transition toward electric vehicles. NBFCs, with their flexible distribution and customer-centric lending models, are positioned to remain influential in this transition.
The broader implication is that India's credit market is becoming more inclusive, but also more dependent on specialized lenders to reach the next wave of borrowers. As NBFCs account for half of new-to-credit customers, they are effectively helping define who enters the formal financial system and on what terms. That makes their role strategically important not only for lenders and borrowers, but for the country's wider consumption, mobility and economic growth story.