India’s retail credit market continued its rapid expansion in the quarter ended March 2026, with total retail credit assets under management (AUM) rising 16 per cent year-on-year to Rs 162 lakh crore, while fresh credit originations surged 40 per cent to Rs 29 lakh crore, according to the latest Retail Credit Trends Report by Equifax India.
The report highlights a lending landscape marked by strong consumer demand, accelerating secured lending and improving asset quality, with gold loans emerging as the standout performer during the quarter.
“India’s retail credit market continues to demonstrate strong momentum, supported by healthy consumer demand and improving portfolio quality,” said Subhankar Mishra, Head of Strategy and Interim Managing Director for Equifax Credit Information.
“The simultaneous growth in credit originations and decline in delinquencies reflects a more disciplined and sustainable lending environment. Gold loans have emerged as a key growth driver, while continued strength in housing and personal loans underscores the resilience of consumer borrowing,” he added.
Gold Loans Drive Lending Growth
Gold loans emerged as the fastest-growing retail lending category, with originations jumping 103 per cent year-on-year during the January-March 2026 quarter.
Disbursements in the segment rose 37 per cent, while outstanding portfolio balances nearly doubled compared with a year ago. Non-banking financial companies (NBFCs) led the growth charge, recording a 213 per cent increase in gold loan originations, significantly outpacing public sector banks, which continue to hold the largest share of gold loan portfolios.
The sharp rise reflects growing consumer preference for secured borrowing amid elevated gold prices and increasing demand for quick access to liquidity.
The report also pointed to a notable divergence between gold-backed lending and business credit. While gold loan activity surged, business loan originations grew by just 3 per cent year-on-year, indicating borrowers may increasingly be turning to gold-backed credit as an alternative financing source.
Housing Loans Scale New Highs
Housing finance remained the largest contributor to retail credit portfolios and recorded one of its strongest quarters on record.
Home loan disbursements reached an all-time high of Rs 3.4 lakh crore during the quarter, with public sector banks accounting for 44 per cent of fresh originations.
The report also observed a growing shift towards premium housing finance, with loans exceeding Rs 1 crore gaining traction as borrowers increasingly opt for larger-ticket purchases.
Personal loans continued to witness healthy demand despite lenders adopting a more calibrated approach to unsecured credit growth.
Asset Quality Improves Across Segments
key takeaway from the report was the continued strengthening of asset quality across the retail lending ecosystem.
Net 90-plus day delinquencies declined across major categories including housing loans, gold loans, business loans, personal loans and credit cards. Fresh slippages also moderated, reflecting tighter underwriting standards, stronger collections and improved borrower repayment behaviour.
Gold loans reported among the lowest delinquency rates across retail lending products, while housing finance portfolios remained resilient despite robust growth.
The credit card segment also showed signs of improving quality. Although new card issuance fell 9 per cent year-on-year, outstanding balances continued to grow and delinquency levels improved, suggesting issuers are prioritising profitability and portfolio quality over aggressive customer acquisition.
Microfinance Sector Stages Recovery
The report highlighted a significant turnaround in the microfinance sector after a challenging period.
Industry-wide 30-plus day delinquency improved sharply to 2.3 per cent in March 2026 from 6.6 per cent a year earlier, while 90-plus day delinquency declined to 1.4 per cent.
Disbursements rose 19 per cent year-on-year to nearly Rs 79,000 crore, indicating a recovery in borrower repayment capacity and greater stability within the broader credit ecosystem.
The improvement mirrors positive trends across retail lending categories and reinforces confidence in the sector’s overall health.
NBFCs Outpace Industry Growth
Among lender categories, NBFCs emerged as the fastest-growing segment, recording a 97 per cent increase in overall credit originations during the quarter.
Growth was primarily driven by gold loans and personal lending, highlighting NBFCs’ ability to tap emerging credit opportunities and cater to customer segments seeking faster and more flexible financing options.
According to Equifax, the combination of rising secured lending, healthier repayment trends and strong consumer demand points to a maturing retail credit market that is increasingly balancing growth with prudent risk management.
With gold loans, housing finance and personal credit continuing to gain traction, the report suggests India’s retail lending sector remains well positioned to sustain its growth momentum through the rest of 2026.