NBFC credit driven by retail loans, RBI data shows

Non banking finance companies (NBFCs) recorded 14% year-on-year loan growth in May compared to 11% recorded a year ago. This growth was led by 20% rise in retail loans and 18% to agriculture and allied activities, Reserve Bank of India (RBI) data showed. This is the first time that RBI has revealed monthly data on sectoral credit growth for NBFCs.

Retail loans contributed the most in overall credit growth by NBFCs increasing 20% year on year in May 2026 from the 15% growth recorded a year ago. Loans against gold jewellery was the fastest growing segment in the loans from NBFCs increasing at a brisk 70% to Rs 3.29 lakh crore at double the pace from the 39% year on year growth recorded last year.

which are dominated by NBFCs also grew quickly at 42% year on year from 21% recorded in May 2025. The strong rise in the consumer durable loans is in contrast to the 3% fall in bank loans to this segment.

For NBFCs the pace of growth in vehicle loans also remained strong growing at 15% year on year, though it was slower than the 16% growth recorded in the year ago period. For NBFCs, credit growth to the services sector moderated to 17% year on year in May 2026 against 24% growth recorded a year ago. Within services credit growth to transport operators and trade moderated but loans to commercial real estate expanded 40% to Rs 1.19 lakh crore up from a 10% growth reported a year earlier.

Overall credit growth by NBFCs was slower than the 17% growth recorded by banks, according to sectoral deployment of bank credit for May 2026. Bank credit to industries was also faster growing at an annual rate of 18% in May compared to the 7% growth reported by NBFCs primarily lending to the power sector.