Move over Maharashtra, Tamil Nadu -- UP, MP and Bihar are big drivers of India’s credit growth
According to TransUnion CIBIL, the number of Indians who have taken a loan at least once has more than doubled between March 2016-2026 and the share of women among the active credit population has notably increased.
- Jul 30, 2026,
- Updated Jul 30, 2026 3:22 PM IST
India’s credit landscape is rapidly expanding with data from TransUnion CIBIL showing that the proportion of eligible Indians who have taken credit at least once has more than doubled to 74% in March 2026 from 35% in March 2017. And, importantly, this growth is increasingly being driven by states like Uttar Pradesh, Madhya Pradesh and Bihar, while traditional strongholds in the south and west have seen a moderation.
This, perhaps, is a clear sign of how financial and credit inclusion has expanded over time with more Indians from the smaller towns and hinterlands now getting access to the organised banking and financial services industry.
The data from TransUnion CIBIL shows, Maharashtra and Tamil Nadu, which have for long been the traditional strongholds of credit uptake, still remain among the largest credit market. However, Maharashtra’s share in terms of credit active consumers has moderated from 12% to 10% and Tamil Nadu’s share has come down from 11% to 9% from March 2017 to March 2026.
On the other hand, the share of credit active consumers in Uttar Pradesh surged to 11% from 8%, Madhya Pradesh saw its share increase to 6% from 4% and Bihar’s share rose to 5% from 3%.
“Today, the most populous state in the country also has the highest proportion of credit active consumers in the state, what it means is that the consumers in this geography have moved from informal credit to the formal credit sector. The three states, which had the highest growth were actually UP, MP and Bihar,” noted Bhavesh Jain, MD and CEO of TransUnion CIBIL.
As such, the data shows that the share of credit active consumers from semi-urban and rural markets has gone up to 63% from 53% between March 2017 to March 2026.
Another notable visible trend is that two-wheelers are now longer the biggest driver of the new-to-credit customers in the country. Rather, it’s the smartphone, and other consumer durables that are now the big drivers for first time borrowers.
“Pre-Covid, two-wheelers used to bring in the highest proportion of new-to-credit in India, along with agriculture and priority sector lending. Coming to 2026, consumer durables bring in the highest proportion of the new to credit in India. The average ticket size of these consumer durable loans is Rs 38,000, so it’s the mid-range phone, and mid-range household goods,” pointed Jain.
According to him, earlier, two-wheeler was typically the first major asset one would seek to travel from say home to office. While, that market continues to grow and ticket sizes have gone up, for the younger generation, a smartphone is now a must buy, whether its because of work from home, or for content creation or other work.
Between March 2017 and March 2026, the total number of credit active consumers has more than doubled to 28% from 11%. Notably, the share of woman borrowers in the active credit population has gone up to 30% from 22%. Also, the share of younger borrowers (those under 35) has increased to 39% from 33%.
Even as the pie is increasing, TransUnion CIBIL officials point that delinquencies across most retail loan products are at a near decade low. Overall retail delinquency has come down to 1.3 per cent, with delinquencies in personal loans under 1 per cent. Other than the regulatory policies of course, officials point to increased credit monitoring, especially among the younger generation, as a key reason behind this.
“Borrowers who do credit monitoring, actually have a much better cure rate (calculated as of all accounts where days past due was over 30 a month prior to enrolment and zero days past due after enrolment), which means they actually directly contribute to the credit portfolio quality,” according to Jain. Still, Jain notes that financial institutions are now typically preferring deepening their relationship with existing customers over new-to-credit.
“Within existing-to-credit customers also, lenders are preferring existing to bank borrowers, which means not just the ones who have established credit history, but also within that who have an existing relationship with them in the form of a previous loan or credit card or any of the trade facilities,” he stated.
TransUnion CIBIL sees huge opportunities for the market to scale up, with the need for deeper engagements with credit active and credit experienced consumers and deepening credit penetration, bringing in more new-to-credit consumers to the market.
India’s credit landscape is rapidly expanding with data from TransUnion CIBIL showing that the proportion of eligible Indians who have taken credit at least once has more than doubled to 74% in March 2026 from 35% in March 2017. And, importantly, this growth is increasingly being driven by states like Uttar Pradesh, Madhya Pradesh and Bihar, while traditional strongholds in the south and west have seen a moderation.
This, perhaps, is a clear sign of how financial and credit inclusion has expanded over time with more Indians from the smaller towns and hinterlands now getting access to the organised banking and financial services industry.
The data from TransUnion CIBIL shows, Maharashtra and Tamil Nadu, which have for long been the traditional strongholds of credit uptake, still remain among the largest credit market. However, Maharashtra’s share in terms of credit active consumers has moderated from 12% to 10% and Tamil Nadu’s share has come down from 11% to 9% from March 2017 to March 2026.
On the other hand, the share of credit active consumers in Uttar Pradesh surged to 11% from 8%, Madhya Pradesh saw its share increase to 6% from 4% and Bihar’s share rose to 5% from 3%.
“Today, the most populous state in the country also has the highest proportion of credit active consumers in the state, what it means is that the consumers in this geography have moved from informal credit to the formal credit sector. The three states, which had the highest growth were actually UP, MP and Bihar,” noted Bhavesh Jain, MD and CEO of TransUnion CIBIL.
As such, the data shows that the share of credit active consumers from semi-urban and rural markets has gone up to 63% from 53% between March 2017 to March 2026.
Another notable visible trend is that two-wheelers are now longer the biggest driver of the new-to-credit customers in the country. Rather, it’s the smartphone, and other consumer durables that are now the big drivers for first time borrowers.
“Pre-Covid, two-wheelers used to bring in the highest proportion of new-to-credit in India, along with agriculture and priority sector lending. Coming to 2026, consumer durables bring in the highest proportion of the new to credit in India. The average ticket size of these consumer durable loans is Rs 38,000, so it’s the mid-range phone, and mid-range household goods,” pointed Jain.
According to him, earlier, two-wheeler was typically the first major asset one would seek to travel from say home to office. While, that market continues to grow and ticket sizes have gone up, for the younger generation, a smartphone is now a must buy, whether its because of work from home, or for content creation or other work.
Between March 2017 and March 2026, the total number of credit active consumers has more than doubled to 28% from 11%. Notably, the share of woman borrowers in the active credit population has gone up to 30% from 22%. Also, the share of younger borrowers (those under 35) has increased to 39% from 33%.
Even as the pie is increasing, TransUnion CIBIL officials point that delinquencies across most retail loan products are at a near decade low. Overall retail delinquency has come down to 1.3 per cent, with delinquencies in personal loans under 1 per cent. Other than the regulatory policies of course, officials point to increased credit monitoring, especially among the younger generation, as a key reason behind this.
“Borrowers who do credit monitoring, actually have a much better cure rate (calculated as of all accounts where days past due was over 30 a month prior to enrolment and zero days past due after enrolment), which means they actually directly contribute to the credit portfolio quality,” according to Jain. Still, Jain notes that financial institutions are now typically preferring deepening their relationship with existing customers over new-to-credit.
“Within existing-to-credit customers also, lenders are preferring existing to bank borrowers, which means not just the ones who have established credit history, but also within that who have an existing relationship with them in the form of a previous loan or credit card or any of the trade facilities,” he stated.
TransUnion CIBIL sees huge opportunities for the market to scale up, with the need for deeper engagements with credit active and credit experienced consumers and deepening credit penetration, bringing in more new-to-credit consumers to the market.