India sees strong credit growth in FY26 led by services and retail demand

India recorded robust credit growth in the financial year 2025?26, reflecting strong domestic demand and improving economic confidence, according to a press release by the Ministry of Finance. Non-food credit grew 15.9% year-on-year, up sharply by 497 basis points from 10.9% in the previous year.

Total outstanding credit reached ₹212.9 lakh crore in March 2026, an increase of ₹29.2 lakh crore compared to last year. The growth was supported by a low-interest rate environment, government-led capital expenditure, and structural reforms that encouraged private investment.

Sector-wise, growth was broad-based. The services sector led with a 19.0% rise, up from 12.0% a year ago, driven by strong demand from NBFCs, trade, and commercial real estate. The personal loans segment, which holds a 33% share of total credit, expanded by 16.2%, supported by steady housing demand and strong growth in vehicle and gold loans.

Credit to agriculture and allied activities grew 15.7%, significantly higher than 10.4% last year, reflecting improved rural demand and greater access to formal credit. Meanwhile, industrial credit nearly doubled its growth rate to 15.0% from 8.2%, led by micro and small enterprises, which saw a sharp 33.1% increase.

Overall, the strong credit expansion highlights a resilient economic environment, with rising borrowing supporting business expansion, consumption, and job creation across sectors.

Powered by Capital Market - Live News