India's non-banking finance companies have emerged as a central gateway to formal credit for millions of 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 released on Thursday. The study, which draws on data from about 2,000 NBFCs, highlights how the sector has become increasingly important in extending credit to households and businesses that have historically remained outside the mainstream banking net.
The trend is significant not only for the financial system but also for sectors such as automotive, electric vehicles and mobility, where access to retail finance often determines whether a purchase is possible at all. For many consumers, especially in semi-urban and rural markets, NBFCs are the first point of contact with formal lending. Their growing role in the new-to-credit segment suggests that vehicle ownership, two-wheeler upgrades and early EV adoption are increasingly being financed through institutions that are more flexible, distribution-heavy and closer to the customer than traditional banks.
Credit Access Shifts
The report points to a structural shift in India's credit landscape over the past decade. New-to-credit borrowers are typically individuals with no prior bureau history, making them harder to underwrite using conventional models. NBFCs, by contrast, have built business models around thinner-file customers, using alternative data, field-level sourcing and product designs suited to borrowers with limited formal credit footprints. The rise from 24% to 50% indicates that NBFCs have not merely expanded their lending book; they have become a primary on-ramp into the credit system.
This evolution matters because the first loan often shapes a borrower's long-term relationship with formal finance. A timely repayment can establish a credit record, improve future borrowing capacity and support larger-ticket purchases, including vehicles. In India's mobility market, where affordability remains a decisive factor, the availability of first-time credit can be as important as product innovation. That is especially relevant for the electric vehicle segment, where financing structures are still adapting to new residual values, battery-linked risks and evolving consumer demand.
Mobility Finance Implications
For the automotive and mobility ecosystem, the report reinforces the importance of NBFCs as demand enablers. Two-wheeler finance, used-car lending and entry-level passenger vehicle loans have long depended on NBFC networks, particularly in markets where bank penetration is lower or approval cycles are slower. As EV adoption broadens, NBFCs are likely to remain critical in financing lower-cost electric two-wheelers, last-mile delivery fleets and small commercial vehicles, segments where first-time borrowers are common.
The report also suggests that lenders are increasingly competing on reach and responsiveness rather than only on pricing. NBFCs often operate through dealer partnerships, local sourcing teams and faster turnaround times, which can be decisive in mobility purchases. Their ability to serve new-to-credit customers at scale may help sustain vehicle demand even when broader credit conditions tighten.
At the same time, the concentration of first-time borrowers in the NBFC segment raises questions about underwriting discipline, portfolio quality and the resilience of lending models through economic cycles. New-to-credit customers can be profitable over time, but they also require careful risk assessment, especially in asset-backed lending where delinquency can rise quickly if incomes weaken or resale values fall.
Broader Financial Inclusion
Beyond mobility, the data reflects a deeper change in India's financial inclusion story. The expansion of NBFC-led credit access suggests that formal lending is reaching a wider base of consumers who may previously have relied on informal borrowing. That has implications for consumption, entrepreneurship and household asset creation. It also points to the growing importance of bureau data in shaping lending decisions as more first-time borrowers enter the system.
For policymakers and lenders alike, the message is clear: the next phase of credit expansion will depend not just on volume, but on the quality of access. If NBFCs continue to serve as the main bridge for new-to-credit borrowers, their role in India's economic and mobility growth story is likely to deepen further. The challenge will be to preserve that reach while maintaining prudent lending standards, especially as the market for vehicles and EVs becomes more competitive and more data-driven.