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Digital non-banking financial companies (NBFCs) are now central to India’s personal loan market, significantly contributing to the expansion of formal credit, and digital personal loans remain critical to the nation's credit landscape, a report said on Wednesday.  

In the first half of the current financial year (H1 FY26), 6.4 crore digital personal loans, worth Rs 97,381 crore, were sanctioned, making up 80 per cent of all personal loan volumes and 19 per cent of sanction value.

"Meanwhile, the average sanctioned ticket size rose to Rs 15,177, compared to Rs 23,327 in the same period last year (H1 FY24 25)," RBI-recognised self-regulatory organisation, Fintech Association for Consumer Empowerment (FACE) said in its report.

Additionally, sanction volumes grew from 5.9 crore in H1 FY25 to 6.4 crore in H1 FY26, while sanctioned value increased from Rs 78,084 crore to Rs 97,381 crore, signalling stronger demand and improved underwriting quality.

"Ticket size growth indicates a shift toward higher value lending as borrowers build credit history and repayment performance continues to improve," the report noted.

At the same time, outstanding digital personal loan portfolios reached 5.99 crore accounts and Rs 1.28 lakh crore as of September, with portfolio quality improving to 2.1 per cent days past due (dpd) 90 plus.

FACE CEO Sugandh Saxena said: "The FinTech lending ecosystem is operating in sync with the public policy objective of digital financial inclusion for inclusive growth and resilience."

Access to formal, suitable, convenient, and safe digital credit options is critical to support individuals and the country’s consumption and resilience. India’s digital lending market is scaling sustainably on the foundation of customer-protection, prudence, and risk management, Saxena added.

Credit distribution continues to widen, with 60 per cent of sanctioned value from borrowers under 35 years, 17 per cent sanctioned to women, and 53 per cent originating from tier III and beyond, demonstrating sustained expansion of formal credit access into young and emerging segments, the report highlighted.