Summary of this article
Digital loan book grows 28% YoY
Sanction value rises 50% in Q1
Young borrowers drive digital credit
India’s digital personal loan market has continued to expand in the first quarter of FY2026-27, with the outstanding loan portfolio of digital non-banking financial companies (NBFCs) rising to 28 per cent on a year-on-year (y-o-y) basis to Rs 1.54 lakh crore as of June 2026, according to the latest report by the Fintech Association for Consumer Empowerment (FACE).
The report, which analysed personal loan data from more than 110 Digital NBFCs, used data sourced from CRIF High Mark to track trends from April 2022-June 2026. FACE defines Digital NBFCs as lenders that primarily offer digital personal loans through their own digital lending apps or through lending service providers.
NBFCs Account For 70% Of Loan Volume
During Q1 FY2026-27, Digital NBFCs sanctioned 34 million personal loans worth Rs 64,656 crore. This represented 70 per cent of the total personal loan sanction volume and 22 per cent of sanction value during the quarter. The average ticket size stood at Rs 18,802, around 15 per cent higher than the previous financial year. Despite the increase, digital loans continue to have a substantially lower average ticket size than loans sanctioned by other NBFCs and banks at Rs 70,025 and Rs 4.52 lakh, respectively.
Loan sanction volume grew by 14 per cent on a y-o-y basis and 2 per cent sequentially in Q1 FY2026-27. Sanction value increased by 50 per cent on a y-o-y basis to a total of Rs 64,656 crore and 4 per cent from the previous quarter.
Larger Loans and More Experienced Borrowers
FACE said digital lending is gradually moving towards larger ticket-sized, longer bureau histories and borrowers with relatively stronger credit profiles. Around 60 per cent of the sanction value came from loans above Rs 50,000, borrowers with a bureau vintage of five years or more, and customers in the mid- to low-risk categories. The average ticket size has risen steadily from Rs 12,954 in FY2022-23 to Rs 18,802 in Q1 FY 2026-27.
Young Borrowers Drive Digital Credit
The report highlighted that young consumers remain a major segment of the digital personal loan market. Nearly 58 per cent of sanction value in Q1 FY2026-27 went to borrowers below 35 years of age. Customers aged 26-35 accounted for 44 per cent of sanction value, while those below 25 accounted for another 14 per cent. Digital lending also maintained a strong footing in smaller cities. Around 40 per cent of sanction value went to borrowers in tier-III cities and beyond. Women accounted for 18 per cent of the sanction value, broadly in line with other lending segments.
Overall, the data reveals that there’s continued expansion of digital personal lending, with digital NBFCs increasing their role in India’s unsecured retail credit market, while also being a dependable source for young borrowers and customers beyond the major metro hubs.
