India's formal retail credit penetration more than doubled over the past decade, with the share of consumers who accessed credit at least once rising from 35% in March 2017 to 74% in March 2026, according to TransUnion CIBIL's latest report. The expansion took place even as the credit-eligible population grew from 79 crore to 89 crore.
The report shows a sharp rise in engagement, not just reach: the proportion of credit-active consumers increased from 11% to 28%, indicating deeper participation in formal finance. TransUnion CIBIL said consumption-led lending has emerged as the primary driver, with personal loans, credit cards and consumer durable loans becoming the dominant entry point into the credit system.
"The changes in wallet composition point to how credit is being increasingly seen as a means to drive a lifestyle-driven approach today, compared to the asset-based approach seen a decade ago. Credit dispersion has travelled a long way thanks to consumption loans," said Bhavesh Jain, MD and CEO of TransUnion CIBIL.
Consumption products dominate borrower wallets
The composition of borrower portfolios has shifted materially, according to the report. The share of credit-active consumers holding consumption products rose from 34% in 2017 to 51% in 2026, and the number of such borrowers grew fourfold. This category now accounts for the largest share of borrower wallets.
| Metric | March 2017 | March 2026 |
|---|---|---|
| Consumers who accessed credit at least once | 35% | 74% |
| Credit-eligible population | 79 crore | 89 crore |
| Credit-active consumers | 11% | 28% |
| Share of credit-active consumers holding consumption products | 34% | 51% |
Geography of credit shifts
Credit growth has shifted away from traditional strongholds in western and southern India towards northern and central states. According to the report, the credit-active population share:
- Rose in Uttar Pradesh from 8% in 2017 to 11% in 2026.
- Rose in Madhya Pradesh from 4% to 6%.
- Rose in Bihar from 3% to 5%.
By contrast, Maharashtra and Tamil Nadu saw their shares moderate, although they remain among the largest credit markets.
Borrower profile broadens
First-time borrowers are now more likely to start with small-ticket unsecured loans rather than large asset-backed loans such as vehicles or housing, and these loans are often used to finance electronics and consumer goods, the report said. The borrower base also broadened across demographics, with an increased share of women, younger borrowers under 35 years of age, and semi-urban and rural consumers, indicating wider dispersion of credit across regions and income segments.
"For younger borrowers, mobile phones rather than two-wheelers and vehicles appear to be products of choice," Jain said.
Reference points for finance executives
For CFOs, treasury directors and trade finance professionals monitoring India's consumer economy, the report offers a quantified baseline for formal credit participation. The rise in credit-active consumers from 11% to 28% means a broader share of the eligible population now holds formal credit records, a factor relevant to payment behaviour and receivables risk in consumer-linked supply chains. The fourfold increase in borrowers holding consumption products identifies consumption lending as the principal channel through which formal credit has expanded over the decade, according to TransUnion CIBIL.
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