Digital NBFCs vs banks: The ₹18,802 vs ₹4.52 lakh personal loan divide

India’s personal loan market is increasingly split by the size and nature of borrowing, with digital NBFCs catering to high-volume, smaller-ticket borrowers while banks continue to sanction substantially larger loans. The contrast is stark: the average personal loan sanctioned by a digital NBFC stood at ₹18,802 in Q1 FY26-27, against ₹4.52 lakh for banks.

The data from the Fintech Association for Consumer Empowerment (FACE), based on CRIF High Mark information, shows that digital NBFCs sanctioned 3.4 crore personal loans worth ₹64,656 crore during the quarter. This represented 70% of the total personal loan sanction volume, but only 22% of sanction value. Banks, in contrast, accounted for just 7% of sanction volume but 52% of sanction value.

Smaller loans, much larger volumes

The gap in ticket sizes helps explain this difference. Other NBFCs had an average sanction size of ₹70,025, placing them between digital NBFCs and banks. The overall personal loan market recorded an average ticket size of ₹61,112 during the quarter.

Digital lending has traditionally been positioned around borrowers seeking relatively small-value loans, including customers requiring credit for shorter periods. FACE said the digital lending business model is suited to customer segments requiring small-value loans for a short period.

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The distribution of digital loan sizes reflects this positioning. In Q1 FY26-27, 27% of digital NBFC sanction value came from loans below ₹25,000, while another 12% was accounted for by loans in the ₹25,000-50,000 bracket. At the same time, the market is not restricted to very small loans, with loans above ₹50,000 accounting for a significant share of sanction value.

Digital NBFCs vs banks: Key numbers

Source: FACE, Digital Personal Loans – Apr-Jun 2026.

Different borrower profiles

The borrower mix also differs across the market. Digital NBFCs have a relatively young customer base, with 58% of sanction value going to borrowers below 35 years. About 40% of sanction value came from Tier III cities and beyond.

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Ticket sizes also vary within the digital lending segment. FACE found that average loan sizes increase with age and bureau vintage, while they are higher for urban and metro customers. The average ticket size for borrowers with more than five years of bureau vintage was ₹31,007, compared with ₹6,857 for those with less than one year of vintage.

Meanwhile, digital lending is gradually moving towards larger-value loans. The average ticket size increased about 15% from FY25-26 to ₹18,802 in Q1 FY26-27. Sanction value also grew 50% year-on-year, compared with 14% growth in sanction volume.

The numbers therefore highlight two distinct segments within India's personal loan market: digital NBFCs generate high volumes through smaller loans, while banks account for a much larger share of the value through substantially higher-ticket borrowing.

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