India's non-banking finance companies have emerged as a central gateway to formal borrowing for millions of first-time credit users, with NBFCs now accounting for 50% of the country's new-to-credit borrowers in June 2026, up from 24% in June 2016, according to a TransUnion CIBIL-FIDC report released on the basis of data from about 2,000 NBFCs.
The sharp rise highlights how the lending ecosystem has shifted over the past decade, with NBFCs increasingly serving borrowers who are either outside the reach of banks or are entering the credit system for the first time. The trend is particularly significant for India's mobility and automotive financing market, where access to small-ticket loans, two-wheeler finance, used vehicle credit and EV financing has become a critical enabler of ownership and adoption.
Credit Access Shifts
The report points to a structural change in the composition of India's borrower base. New-to-credit customers, or those with no prior formal borrowing history, are often the hardest segment for lenders to underwrite because they lack repayment records. NBFCs, with their wider distribution networks, faster turnaround times and greater willingness to lend in semi-urban and rural markets, have increasingly filled that gap.
This expansion matters beyond the financial sector. In automotive lending, first-time borrowers are often the entry point for vehicle ownership, especially in price-sensitive segments such as two-wheelers, entry-level passenger vehicles and commercial mobility. As India's vehicle market evolves, NBFCs are helping convert latent demand into actual purchases by extending credit to customers who may not qualify easily with banks.
The report's findings also reflect the broader democratization of credit in India, where formal lending is reaching deeper into the economy. For many households, the first loan is not a mortgage or a personal loan from a bank, but a vehicle loan, a consumer durable loan or a small business financing line arranged through an NBFC. That makes the sector strategically important to both consumption and mobility-led growth.
Mobility Finance Expands
The automotive and EV financing landscape is becoming more diverse as NBFCs adapt to changing demand. The rise of electric two-wheelers, fleet electrification and used-vehicle financing has created new lending opportunities, but also new underwriting challenges. Lenders must assess residual values, battery risk, usage patterns and borrower affordability in a market that is still developing pricing benchmarks.
For EVs in particular, NBFC participation can be decisive. Many first-time EV buyers are price-conscious and may need flexible repayment structures, lower down payments or tailored loan products. NBFCs, by operating closer to the customer and often working with dealers and manufacturers, are better positioned than traditional lenders to structure such offerings at scale.
At the same time, the growing share of new-to-credit borrowers raises questions about portfolio quality and risk management. First-time borrowers can be more vulnerable to income shocks, especially in informal or seasonal occupations. That means the expansion of credit access must be matched by stronger data-driven underwriting, collection discipline and borrower education to avoid future stress in loan books.
Wider Credit Deepening
The TransUnion CIBIL-FIDC report also signals that India's credit deepening is no longer confined to metropolitan borrowers with established financial histories. Instead, the next phase of growth is being driven by smaller cities, emerging consumption centres and mobility-linked financing needs. NBFCs have become a crucial bridge between underserved demand and formal finance.
For policymakers and lenders, the trend is a reminder that inclusion and prudence must advance together. A larger pool of first-time borrowers can support vehicle sales, improve household mobility and stimulate economic activity, but only if lenders maintain sound credit standards. The challenge for the sector is to keep expanding access without compromising asset quality.
The report's data, drawn from roughly 2,000 NBFCs, suggests that the industry's reach is now broad enough to shape national credit trends rather than merely follow them. In the automotive and mobility space, that influence is likely to grow further as India's transition toward cleaner, more affordable and more accessible transport accelerates.