With growing demand for products like housing loans, auto loans, gold loans, and credit cards, the sector is expected to grow at a 14–16% CAGR between FY25 and FY28.
| Photo Credit:
iStockphoto
The rising demand in India’s retail credit market has opened new opportunities for Non-Banking Financial Companies (NBFCs) to expand their investor base, according to a recent report by Crisil Intelligence.
The report highlighted the strong and consistent growth seen in the Indian retail credit space and predicts continued momentum over the next few years.
It stated, “The increasing demand and positive sentiments in the Indian retail credit market, presents an opportunity for both banks and NBFCs to broaden their investor base.
“With more retail borrowers coming into the fold, NBFCs have the chance to diversify funding sources and attract new categories of investors.
Retail credit at ₹82 lakh crore, CAGR of 15% since FY19
According to the report, the Indian retail credit market has been growing at a rapid pace and is projected to register a compound annual growth rate (CAGR) of 14-16 per cent between FY25 and FY28.This robust growth trajectory is driven by steady demand for various retail credit products such as housing finance, vehicle financing, gold loans, education loans, consumer durables, personal loans, credit cards, and microfinance.
As of FY25, the total retail credit in India stood at ₹82 lakh crore, reflecting a strong CAGR of 15.1 per cent between FY19 and FY25. In FY25 alone, retail credit grew by 14 per cent, backed by consistent demand in key asset segments like housing and auto.
Additionally, the consumption-led surge in credit card usage and personal loan demand also played a significant role in this growth.
The report also highlighted a substantial gap in retail credit penetration in India. As of calendar year 2024, India’s household credit-to-GDP ratio stood at 42 per cent, significantly lower than China’s 60 per cent, the United States’ 69 per cent, and the United Kingdom’s 76 per cent.
This indicated vast potential for further credit growth in India, especially in underserved segments.
Credit-to-GDP gap signals untapped market
Moreover, India’s overall credit-to-GDP ratio was 93 per cent in CY2024, compared to 138 per cent for the United Kingdom, and 198 per cent for China. This further pointed out the headroom available for credit expansion in the country.
The report concluded that rising financial awareness, government initiatives aimed at financial inclusion, and improved access to credit for the underserved population are expected to boost credit penetration. The surge will primarily be led by retail credit, creating an expansive opportunity for financial institutions to grow.
Published on August 6, 2025
