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Digital Lenders Gain Ground as Younger Indians Seek Personal Loans
A new report says more Indians are taking personal loans through digital lending apps.
These apps are especially popular with younger people and borrowers in smaller cities.
From April to June 2026, digital lenders approved 3.4 crore loans worth ₹64,656 crore.
That was 70% of all personal-loan approvals by number, but only 22% of the total money lent.
This is because digital lenders usually provide smaller loans than banks.
People under 35 received more than half of the money lent through these digital lenders.
Banks still provide much larger loans on average.
The report says digital lenders should continue growing while keeping lending transparent and responsible.
Digital NBFCs sanctioned 3.4 crore personal loans worth ₹64,656 crore in Q1 FY27.
Digital lenders accounted for 70% of personal-loan sanction volume but 22% of sanction value.
Their average loan size was ₹18,802, compared with ₹70,025 for other NBFCs and ₹4.52 lakh for banks.
Borrowers below 35 received 58% of digital-loan sanction value, while customers in Tier III cities and beyond received about 40%.
Digital NBFCs’ share of sanction value rose from 12% in FY22 to 22% in Q1 FY27, while banks’ share fell from 72% to 52%.
- Who
- Digital non-banking financial companies, banks, other NBFCs, and Indian personal-loan borrowers; the report was released by the Fintech Association for Consumer Empowerment.
- What
- A report found that digital NBFCs are gaining share in India’s personal-loan market and are particularly serving younger borrowers and customers in smaller cities.
- Where
- India, including Tier III cities and beyond.
- When
- The report covers April 2022 to June 2026, with key figures for Q1 FY27, from April through June 2026.
- Why
- Digital lending is expanding access to smaller-ticket unsecured credit, while banks continue to dominate higher-value personal borrowing.
Digital Lending Expansion
Traditional Lending Strengths
Access and borrower reach
Digital Lending Expansion
Digital NBFCs are expanding formal-credit access through lending apps, especially among younger borrowers and customers in smaller cities.
Traditional Lending Strengths
Banks and other established lenders remain part of the personal-loan market and continue to serve borrowers seeking larger amounts.
Loan size and market role
Digital Lending Expansion
Digital NBFCs dominate by number of approvals, with 70% of sanction volume, indicating strong demand for smaller-ticket loans.
Traditional Lending Strengths
Banks dominate by loan value and have a much higher average ticket size, ₹4.52 lakh compared with ₹18,802 for digital NBFCs.
Growth and responsibility
Digital Lending Expansion
Digital NBFCs’ share of sanction value increased from 12% in FY22 to 22% in Q1 FY27, showing continued expansion.
Traditional Lending Strengths
The Fintech Association for Consumer Empowerment says continued growth should prioritize transparency, customer interests, responsible conduct, and responsible credit behaviour.
Key facts
- Report
- Digital Personal Loans
- Report publisher
- Fintech Association for Consumer Empowerment, an RBI-recognised Self-Regulatory Organisation for the FinTech sector
- Data source
- CRIF High Mark data covering more than 110 digital NBFCs
- Q1 FY27 digital loans
- 3.4 crore loans worth ₹64,656 crore
- Digital share
- 70% of sanction volume and 22% of sanction value
- Average digital loan
- ₹18,802, up 15% from FY25-26
- Borrower profile
- 58% of sanction value went to borrowers below 35; about 40% went to customers in Tier III cities and beyond
Quotes
Sugandh Saxena
CEO of the Fintech Association for Consumer Empowerment (FACE)
“The report underlines the scale and relevance of digital NBFCs in India’s unsecured credit market. Their ability to serve consumers across demographics and use cases is an important contribution to expanding formal credit. Quality growth will sustain by keeping customer interest, transparency and responsible conduct at the centre and engaging with consumers for responsible credit behaviour.”
livemint.com
Sources
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