India's non-banking financial companies have emerged as a critical gateway to formal credit, 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 released on Tuesday. The study, which draws on data from about 2,000 NBFCs, points to a structural shift in how first-time borrowers are entering the country's credit system, especially in segments where banks have historically been slower to penetrate.
The report's central finding is significant not only for lenders but also for policymakers tracking financial inclusion. New-to-credit, or NTC, borrowers are individuals with no prior formal credit history. Their entry into the system is often seen as a key indicator of expanding access to finance, but it also presents underwriting challenges because lenders have limited repayment data to assess risk. NBFCs, with their wider distribution networks and more flexible product design, appear to have become the primary channel for bringing these borrowers into the formal economy.
NBFCs Expand Reach
The rise in NBFC-originated NTC borrowers reflects the sector's deepening presence across consumer and mobility-linked lending markets. NBFCs have long played a larger role than banks in serving customers in smaller towns, semi-urban markets and niche borrower segments that may not fit conventional bank credit profiles. In the context of automotive, EVs and mobility, this matters because vehicle financing remains one of the most important entry points into formal credit for households and small businesses.
The report suggests that NBFCs are increasingly shaping the first credit experience for millions of Indians. That has implications beyond balance sheets: the first loan often determines whether a borrower can later access larger-ticket credit, including vehicle loans, business finance and housing-related products. As India's mobility market evolves, especially with the push toward electric vehicles and asset-light transport models, credit access will remain central to adoption.
Credit Inclusion, Risk Balance
The expansion of NTC lending through NBFCs also highlights a delicate balance between inclusion and risk. On one hand, the data points to a healthier broadening of the credit base, with more consumers and small enterprises entering the formal financial system. On the other, first-time borrowers typically have thinner credit files, making them more vulnerable to overleveraging if underwriting standards weaken.
For NBFCs, the challenge is to sustain growth while preserving asset quality. Their business model depends on reaching customers that banks may overlook, but that advantage can also expose them to higher credit volatility if economic conditions soften. The report's long-term comparison, spanning a decade, indicates that NBFCs have not merely participated in credit expansion; they have become central to it. That makes their lending practices increasingly important to the broader health of India's retail credit ecosystem.
The findings also arrive at a time when India's consumer finance market is becoming more data-driven. Lenders are relying more heavily on bureau information, digital onboarding and alternative underwriting tools to evaluate borrowers with limited formal histories. In that environment, the growth of NTC lending through NBFCs may support greater financial inclusion, but it also raises the bar for responsible lending and portfolio monitoring.
Mobility Finance Outlook
For the automotive and mobility sector, the report reinforces the importance of financing in sustaining demand. Vehicle purchases, whether for personal mobility, commercial use or last-mile logistics, are often credit-led decisions. As more first-time borrowers are brought into the system through NBFCs, the sector gains a larger pool of potential customers for two-wheelers, passenger vehicles, commercial fleets and EVs.
This trend could prove especially relevant for electric mobility, where upfront costs remain a barrier for many buyers despite lower operating expenses over time. NBFCs, with their ability to tailor repayment structures and serve underbanked customers, are likely to remain important in financing EV adoption. The report therefore points to a broader market reality: India's transition in mobility will depend not only on product innovation and infrastructure, but also on the availability of accessible credit.
The TransUnion CIBIL-FIDC data captures a decade of change in India's lending landscape. What began as a modest share of NBFC-led first-time borrowing has now become a dominant feature of the market. For lenders, regulators and mobility companies alike, the message is clear: the future of credit growth in India will be shaped as much by inclusion as by scale.