Digital lending rises: Rs 97,381 cr sanctioned in digital loans as online lending captures 80% market share
According to the latest Digital Personal Loans Market Report for H1 FY25–26, 6.4 crore digital personal loans were sanctioned in the first half of the fiscal year, amounting to Rs 97,381 crore. The 6.4 crore sanctions mark a notable increase from 5.9 crore loans in H1 FY24–25.
- Dec 3, 2025,
- Updated Dec 3, 2025 5:14 PM IST
India’s digital lending ecosystem continues its rapid expansion, with new data confirming that Digital NBFCs have become the backbone of the country’s personal loan market. According to the latest Digital Personal Loans Market Report for H1 FY25–26 released by the Fintech Association for Consumer Empowerment (FACE), 6.4 crore digital personal loans were sanctioned in the first half of the fiscal year, amounting to Rs 97,381 crore. This represents 80% of all personal loan volumes and 19% of total sanctioned value, underscoring the sector’s rising importance.
The report, based on CRIF High Mark data from April 2022 to September 2025, highlights a sustained rise in digital lending adoption. The 6.4 crore sanctions mark a notable increase from 5.9 crore loans in H1 FY24–25, while the sanctioned value rose sharply from Rs 78,084 crore to Rs 97,381 crore, reflecting both expanding demand and stronger credit assessment frameworks across digital lenders.
The average ticket size has increased as well—from Rs 13,327 last year to Rs 15,177 in H1 FY25–26 -- indicating that borrowers are upgrading to higher-value loans as their credit histories strengthen. This trend is supported by improving repayment performance. Portfolio quality has significantly strengthened, with DPD 90+ improving to 2.1%, suggesting healthier borrower behaviour and tighter underwriting standards.
The outstanding digital personal loan book stood at Rs 1.28 lakh crore across 5.99 crore active accounts as of September 2025. A striking insight from the report is the demographic and geographic composition of borrowers:
> 60% of the sanctioned value went to borrowers under 35, > 17% went to women, and > 53% originated from Tier III cities and beyond—showcasing deepening financial inclusion and broader credit penetration.
FACE CEO Sugandh Saxena said the sector is aligned with India’s public policy objective of strengthening digital financial inclusion. She noted that the newly released National Strategy for Financial Inclusion (2025–30) recognises the critical role of small-ticket digital credit in reducing reliance on informal or predatory lenders. “Access to formal, suitable, convenient, and safe digital credit options is critical to support individuals and the country’s consumption and resilience,” she said.
Industry experts say the acceleration in digital personal lending is also being driven by rising smartphone penetration, widespread adoption of UPI, and improved data availability through Aadhaar, bank statement aggregators, and the account aggregator framework. Streamlined KYC processes and AI-driven credit scoring models have reduced loan turnaround times from days to minutes, giving Digital NBFCs a decisive advantage over traditional lenders. With festive-season demand and year-end spending cycles boosting credit activity, analysts expect digital lending to close FY25–26 at record highs with further diversification across borrower segments.
India’s digital lending ecosystem continues its rapid expansion, with new data confirming that Digital NBFCs have become the backbone of the country’s personal loan market. According to the latest Digital Personal Loans Market Report for H1 FY25–26 released by the Fintech Association for Consumer Empowerment (FACE), 6.4 crore digital personal loans were sanctioned in the first half of the fiscal year, amounting to Rs 97,381 crore. This represents 80% of all personal loan volumes and 19% of total sanctioned value, underscoring the sector’s rising importance.
The report, based on CRIF High Mark data from April 2022 to September 2025, highlights a sustained rise in digital lending adoption. The 6.4 crore sanctions mark a notable increase from 5.9 crore loans in H1 FY24–25, while the sanctioned value rose sharply from Rs 78,084 crore to Rs 97,381 crore, reflecting both expanding demand and stronger credit assessment frameworks across digital lenders.
The average ticket size has increased as well—from Rs 13,327 last year to Rs 15,177 in H1 FY25–26 -- indicating that borrowers are upgrading to higher-value loans as their credit histories strengthen. This trend is supported by improving repayment performance. Portfolio quality has significantly strengthened, with DPD 90+ improving to 2.1%, suggesting healthier borrower behaviour and tighter underwriting standards.
The outstanding digital personal loan book stood at Rs 1.28 lakh crore across 5.99 crore active accounts as of September 2025. A striking insight from the report is the demographic and geographic composition of borrowers:
> 60% of the sanctioned value went to borrowers under 35, > 17% went to women, and > 53% originated from Tier III cities and beyond—showcasing deepening financial inclusion and broader credit penetration.
FACE CEO Sugandh Saxena said the sector is aligned with India’s public policy objective of strengthening digital financial inclusion. She noted that the newly released National Strategy for Financial Inclusion (2025–30) recognises the critical role of small-ticket digital credit in reducing reliance on informal or predatory lenders. “Access to formal, suitable, convenient, and safe digital credit options is critical to support individuals and the country’s consumption and resilience,” she said.
Industry experts say the acceleration in digital personal lending is also being driven by rising smartphone penetration, widespread adoption of UPI, and improved data availability through Aadhaar, bank statement aggregators, and the account aggregator framework. Streamlined KYC processes and AI-driven credit scoring models have reduced loan turnaround times from days to minutes, giving Digital NBFCs a decisive advantage over traditional lenders. With festive-season demand and year-end spending cycles boosting credit activity, analysts expect digital lending to close FY25–26 at record highs with further diversification across borrower segments.