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India's Unsecured Credit Boom: Personal Loans Lead Growth, UBS Reports
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Moneycontrol•23-09-2026, 14:18
India's Unsecured Credit Boom: Personal Loans Lead Growth, UBS Reports
- •India is entering a strong unsecured credit growth cycle, primarily driven by personal loans, according to a UBS report.
- •This acceleration is supported by improving asset quality, stable household leverage, abundant system liquidity, and a more risk-on approach from lenders.
- •Unsecured leverage in India stabilized after rising from 6% of GDP in FY19 to 10% in FY24, while gold loan growth is expected to moderate, creating room for personal loan expansion.
- •Early signs of recovery are visible, with personal loan growth accelerating to 30% for NBFCs and 9% for banks (a two-year high) by August 2026, based on CRIF data.
- •Asset quality has significantly improved across segments, with NBFC personal loan delinquencies (1-30 days past-due) dropping to 1.8% in August 2026 from 3.5% in June 2024.
Key Questions Answered
UBS reports that India's unsecured credit growth is supported by improving asset quality, stable household leverage, abundant system liquidity, and a risk-on approach from lenders.
Citing CRIF data, UBS noted that personal loan growth accelerated to around 30 percent for NBFCs and 9 percent for banks in August 2026, marking a two-year high for banks.
NBFC personal loan delinquencies in the 1-30 days past-due bucket dropped to 1.8 percent in August 2026 from 3.5 percent in June 2024. Meanwhile, gold loan growth is expected to moderate as gold prices stabilise.
