India's non-banking finance companies have emerged as the dominant entry point into formal borrowing for millions of first-time customers, with their share of new-to-credit borrowers rising to 50% in June 2026 from 24% in June 2016, according to a TransUnion CIBIL-FIDC report released on Thursday.
The report, which draws on data from about 2,000 NBFCs, highlights a structural shift in India's credit market. As banks have tightened underwriting in some segments and expanded cautiously in others, NBFCs have increasingly filled the gap by extending credit to customers with little or no prior borrowing history. That role has become especially important in consumer and mobility-linked finance, where access to a first loan can determine whether a household can buy a two-wheeler, upgrade to a car, or finance an electric vehicle purchase.
NBFCs Expand Credit Access
The rise in NBFC share among new-to-credit borrowers reflects both the scale and the reach of the sector. NBFCs typically operate with more flexible product structures, wider distribution networks and a stronger presence in semi-urban and rural markets than many traditional lenders. That makes them well positioned to serve borrowers who may not yet have a formal credit footprint but do have a demonstrated repayment capacity.
For the automotive and mobility ecosystem, this trend is significant. Vehicle finance is often one of the first formal credit products a household accesses, and NBFCs have long been central to that market. Their growing role in new-to-credit lending suggests that the sector is not only financing purchases, but also helping create the next generation of credit-visible consumers. In practical terms, a first-time borrower who begins with a vehicle loan may later become eligible for housing, personal or business credit.
The report's findings also point to a broader democratization of credit, but one that carries operational and risk-management implications. Lending to first-time borrowers can expand financial inclusion, yet it also requires sharper underwriting, better data use and disciplined collections. NBFCs have increasingly invested in analytics, digital onboarding and alternative assessment tools to manage that balance.
Mobility Finance Takes Lead
The mobility sector stands to benefit directly from this credit expansion. Two-wheeler and passenger vehicle demand in India is closely linked to the availability of retail finance, particularly for customers outside the top tier of the formal banking system. As NBFCs deepen their presence in new-to-credit segments, they help sustain demand across entry-level vehicles, used vehicles and emerging EV categories.
This is especially relevant for electric mobility, where affordability remains a major barrier for many buyers. Financing can narrow the upfront price gap between internal combustion vehicles and EVs, making NBFC participation important to adoption. A larger pool of first-time borrowers also broadens the market for lenders willing to tailor products to lower-ticket, high-volume segments.
At the same time, the sector faces a more complex credit environment. First-time borrowers can be more vulnerable to income shocks, seasonal cash flows and limited credit history. That means the growth in NBFC-led NTC lending may be accompanied by closer scrutiny of asset quality, delinquency trends and portfolio concentration, particularly in vehicle finance and other secured retail products.
Credit Inclusion Deepens
The TransUnion CIBIL-FIDC report reinforces a central theme in India's financial system: inclusion is increasingly being driven by specialized lenders rather than only by large banks. NBFCs have become a bridge between informal economic activity and the formal credit bureau ecosystem, bringing more borrowers into the mainstream and building a data trail that can support future lending.
For policymakers and lenders alike, the shift is notable because it suggests that credit growth is not merely a function of overall loan volumes, but also of who is being brought into the system for the first time. That matters for consumption, vehicle ownership and the broader mobility transition. It also means that the health of NBFC balance sheets, funding access and risk controls will remain closely watched as they continue to shoulder a large share of first-time lending.
The report arrives at a time when India's retail credit market is evolving rapidly, with digital distribution, alternative data and sector-specific financing models reshaping how borrowers access loans. Against that backdrop, NBFCs' rising share of new-to-credit customers signals both opportunity and responsibility: they are not just lenders, but gatekeepers to formal financial participation for a growing slice of India's population.