India's non-banking finance companies have emerged as the dominant channel for first-time borrowers, with their share of new-to-credit customers rising to 50% in June 2026 from 24% in June 2016, according to a TransUnion CIBIL-FIDC report that draws on data from about 2,000 NBFCs. The shift marks a major change in the country's retail credit landscape and highlights the growing role of NBFCs in extending formal finance to borrowers with little or no prior credit history.
The report points to a decade-long broadening of credit access, with NBFCs increasingly serving consumers who may not yet qualify for mainstream bank lending. That trend is especially relevant for automotive finance, two-wheeler loans, and emerging mobility segments, where first-time borrowers often rely on flexible underwriting, faster approvals, and local distribution networks. For lenders, the rise in new-to-credit customers signals both an opportunity and a risk: a larger addressable market, but also a cohort that lacks repayment history and may be more vulnerable to income shocks.
NBFCs Expand Credit Access
The data suggests NBFCs have become central to India's financial inclusion story. By reaching borrowers outside the traditional banking net, they have helped convert informal demand into formal credit demand. This is particularly important in vehicle finance, where access to a loan can determine whether a household buys a two-wheeler for commuting, a small commercial vehicle for income generation, or an entry-level passenger vehicle.
The report's scale is notable. Covering roughly 2,000 NBFCs, it offers a broad view of how lending patterns have evolved across the sector. The increase in the NBFC share of new-to-credit borrowers reflects not only business growth, but also a structural shift in how credit is distributed in India. Banks remain central to the financial system, but NBFCs have increasingly taken the lead in segments where speed, reach, and product customization matter more than scale alone.
For the automotive and mobility ecosystem, this matters because first-time borrowers are often the backbone of volume growth in lower-ticket vehicle categories. Two-wheelers, used vehicles, and small commercial vehicles are especially sensitive to credit availability. A larger pool of new-to-credit customers can support demand, but it also means lenders must rely on alternative underwriting signals, stronger collections discipline, and tighter portfolio monitoring.
What It Means For Mobility
The rise in new-to-credit borrowers through NBFCs comes at a time when India's mobility market is being reshaped by electrification, digitisation, and changing consumer preferences. EV adoption, especially in two-wheelers and fleet-linked mobility, depends heavily on accessible financing. If NBFCs continue to deepen their reach, they could play a decisive role in financing the next wave of vehicle ownership and usage models, from personal mobility to last-mile delivery.
At the same time, the report highlights a delicate balance. New-to-credit borrowers are valuable because they expand the formal credit base, but they also require careful risk assessment. Without a prior repayment record, lenders must depend on income verification, transaction data, vehicle collateral, and behavioural indicators to judge creditworthiness. That makes the quality of underwriting as important as the pace of disbursement.
The findings also carry implications for policymakers and regulators watching credit growth in consumer and vehicle finance. A larger share of first-time borrowers entering the formal system is generally positive for financial inclusion, but it can create stress if lending standards weaken or if economic conditions deteriorate. The challenge for NBFCs will be to sustain growth while preserving asset quality, especially in segments exposed to fuel price swings, uneven household incomes, and seasonal demand patterns.
The report ultimately shows that NBFCs are no longer peripheral players in India's credit market. They are now a primary gateway for millions of borrowers taking their first formal loan, with the automotive and mobility sectors among the clearest beneficiaries. The next phase of growth will depend on whether lenders can convert this expanded reach into durable, well-managed credit relationships rather than short-term volume gains.