Digital non-banking finance companies (NBFCs) have significantly increased formal credit access by approving close to 10 crore loans amounting to Rs 1.53 lakh crore in the initial three quarters of FY26, accounting for 78% of all personal loans, as per a report by the Fintech Association for Consumer Empowerment (FACE). During this period, 9.9 crore digital personal loans were sanctioned, disbursing Rs 1,53,260 crore, with digital personal loans making up 78% of loan volumes and 19% of the total loan value.
The average sanctioned loan amount saw a rise to Rs 15,493, an 18% increase from FY25. In Q3 FY25-26, the sanction value surged by 53% year-on-year, primarily due to larger loan sizes, indicating a market adjustment. Despite this growth, the average loan size remains relatively small compared to traditional NBFCs and banks, which stand at around Rs 1 lakh and Rs 5 lakh, respectively.
Sugandh Saxena, CEO of FACE, highlighted the significance of the digital personal loan market in promoting financial inclusion and resilient growth. The market is continuously expanding its reach, adapting strategies to sustain growth and enhance portfolio quality. Data from credit bureau CRIF High Mark, covering over 110 digital NBFCs, revealed that outstanding digital personal loan portfolios reached 6.47 crore accounts, totaling Rs 1.39 lakh crore by December 2025, a 53% increase from March 2024.
The report also indicated an improvement in portfolio quality, with assets having Days Past Due (DPD) over 90 declining to 1.9% in December 2025 from 3.3% in March 2023. Credit distribution in the FinTech sector remains consistent, with 60% of the sanctioned value directed towards borrowers under 35 years, 18% to women, and 39% to customers from tier 3 cities and beyond. This trend reflects a continuous expansion of formal credit access to younger and underserved segments.
