NBFC credit growth accelerates to 14.2% in May; retail loans major contributor

Non-banking financial companies (NBFCs) in India experienced a notable acceleration in credit growth, reaching 14.2% year-on-year in May 2026, a significant increase from 11.4% recorded in May 2025. This expansion was largely propelled by the robust performance of retail loans, which emerged as the dominant contributor to the overall credit landscape.

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Credit growth in agriculture and allied activities recorded a robust growth of 17.9 per cent (y-o-y) in May 2026 against 5.0 per cent a year ago.

The Reserve Bank of India (RBI) reported that retail loans, encompassing housing, vehicle, and gold-backed loans, grew by 19.5% year-on-year. This sustained consumer demand across key borrowing categories underscores the strength within the retail segment. Simultaneously, the agriculture sector demonstrated impressive growth, with credit expanding by 17.9% compared to 5.0% in the previous year, indicating increased lending to the farm sector.

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Retail loans contributed the most in overall credit growth by NBFCs with 19.5 per cent (y-o-y) growth in May 2026.

In contrast, credit growth directed towards the industrial sector moderated, slowing to 7.3% from 10% a year ago. This deceleration is partly attributed to slower lending to the infrastructure sub-sector. Similarly, credit to the services sector saw a reduction in its growth rate, standing at 16.7% compared to 23.9% in May 2025. Despite this overall moderation in services, lending to the commercial real estate segment continued to expand strongly, remaining a key contributor within this category.

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Credit growth in services sector moderated to 16.7 per cent (y-o-y) in May 2026 against 23.9 per cent a year ago. Among major contributors, growth (y-o-y) in credit to 'Commercial Real Estate' marked buoyant expansion.