NBFC loan growth reached 14.2 percent in RBI's May 2026 data
Non-banking financial companies in India maintained strong loan disbursement in May 2026, with total loan growth recorded at 14.2 percent year-on-year. Retail loans contributed the most to this growth, while the pace of growth in the industrial and services sectors softened compared to the previous year.
Highlights
- NBFC loan growth was 14.2 percent in May 2026, faster than 11.4 percent last year, with agriculture recording a 17.9 percent increase.
- Loans to the industrial sector grew by 7.3 percent, lower than 10.0 percent in May 2025, mainly due to weakness in the infrastructure segment.
- In May 2026, retail loans played a key role in overall loan expansion with 19.5 percent annual growth, covering 87 percent of NBFC and HFC data.
This article was translated from the original. Read the original version by our correspondent here.
Sector-wise Loan Trends for May 2026
According to details from the Reserve Bank of India, provisional data collected from major NBFCs and housing finance companies (HFCs) shows the sectoral deployment of loans as of May 2026. These figures are based on the position as of 31 May 2026, and NBFC loan growth was 14.2 percent year-on-year, up from 11.4 percent a year earlier.Loan growth in agriculture and allied activities reached 17.9 percent, compared to 5.0 percent a year ago. Loans to industry grew by 7.3 percent, lower than 10.0 percent in May 2025, mainly due to relatively weak growth in the infrastructure segment.
Loan growth in the services sector stood at 16.7 percent, down from 23.9 percent a year earlier. However, among the key components, loans to commercial real estate showed rapid expansion.
Contribution and Broad Impact of Retail Loans
Retail loans made the largest contribution to overall loan growth, recording a 19.5 percent annual increase in May 2026, compared to 14.9 percent a year earlier. Within the retail category, there was strong growth in housing loans, vehicle loans, and loans against gold jewellery.These trends indicate that consumer-oriented lending remains the main driver of expansion in the NBFC sector, while momentum in some parts of industry and services remains uneven. According to the RBI, this sectoral data is based on a sample of NBFCs in the upper and middle layers and HFCs, covering about 87 percent of total loans as of September 2025 in RTP 2024-25.
Our previous report discussed the rapid expansion of the middle class in India and its role in consumption-driven growth. That article explained how steps like financial inclusion, digital payments, and tax relief have extended the income-consumption base beyond major metros to Tier II-III cities, keeping demand strong for housing and other consumer needs.
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