Daijiworld Media Network- New Delhi
New Delhi, Aug 6: A new report by Crisil Intelligence has painted an optimistic picture for India’s retail credit landscape, offering a significant growth runway for Non-Banking Financial Companies (NBFCs) looking to expand their investor base.
According to the report, the Indian retail credit market is witnessing sustained growth, fuelled by rising demand across consumer segments. This momentum is expected to continue over the next few years, providing NBFCs with an opportune moment to diversify their funding sources and attract new classes of investors.
Crisil has projected that India’s retail credit market is set to grow at a compound annual growth rate (CAGR) of 14 to 16 percent between FY25 and FY28. As of FY25, retail credit in India stood at ?82 trillion, recording a robust CAGR of 15.1 percent from FY19. In the current fiscal year alone, retail credit saw a growth of 14 percent, largely driven by increased demand for home loans, vehicle financing, and personal loans.
The report highlights a broad-based expansion in retail credit products, including gold loans, education loans, credit cards, consumer durables financing, and microfinance. A surge in credit card usage and consumption-driven personal loans has further added to the upward trajectory.
Despite this rapid growth, the report notes that India still has a considerable gap in credit penetration. The household credit-to-GDP ratio in 2024 stands at 42 percent—well below global benchmarks such as China (60%), the United States (69%), and the United Kingdom (76%).
India’s overall credit-to-GDP ratio is currently at 93 percent, compared to 138 percent for the UK and a staggering 198 percent for China. This highlights the vast untapped potential in India’s credit market, especially in underserved and semi-urban segments.
The report concludes that a combination of rising financial awareness, ongoing government efforts towards financial inclusion, and enhanced access to formal credit channels is set to deepen credit penetration across the country. NBFCs, in particular, are well-positioned to capitalise on this trend, with the retail credit segment expected to lead the next phase of growth in India’s financial sector.