NBFCs dominate first-time borrower lending with over 60% share: CRIF High Mark

The report, titled “Bridging The Gap: Unlocking Growth from New-to-Credit Borrowers,” highlights that NBFCs remain the primary channel for individuals entering the formal credit system, while banks have maintained a relatively cautious stance in this segment.

The findings come amid a steady expansion in India’s credit-active population, which stood at 29 crore as of February 2026. Within this, the first-time borrower base has grown from 3.6 crore in the 12 months ending February 2022 to 4.4 crore in the 12 months ending February 2026.

First-time borrowers accounted for 17.8% of overall loan originations in the 12 months ending February 2026, though their share has moderated from 23.5% in the earlier period, reflecting a more selective lending environment.

Consumer durable loans remained the most common entry product, making up 32% of accounts, followed by gold loans and two-wheeler loans. Together, these three segments accounted for about 60% of total first-time borrower accounts during the period.

The report noted a gradual borrower progression pattern, where individuals typically begin with small-ticket loans before moving to structured credit products. It also highlighted stronger participation from semi-urban and rural markets, which contributed more than half of originations across key loan categories.

Women’s participation continued to rise, with their share in first-time borrower accounts increasing from 33% to 41% over the past five years. The report also observed that 67% of first-time borrowers moved into low-risk or very low-risk categories within one year of accessing formal credit, indicating improving repayment behaviour.

States such as Uttar Pradesh, Tamil Nadu, and Maharashtra led women-driven borrowing activity, particularly in consumer durable, gold, and business loan segments.

The report said that while lenders are becoming more selective, the segment continues to offer steady, risk-calibrated growth opportunities across emerging geographies and younger borrower cohorts.