Need for credit shifting from asset ownership to consumer durables: TransUnion CIBIL report

Credit behaviour in India has changed dramatically, post the Covid19 pandemic. Credit is now moving from asset ownership towards consumption (consumer durables) and entrepreneurship (business loans), a TransUnion CIBIL study on the "Journey of credit expansion in India" released on Thursday shows.

"Consumer durable loans (new to credit) are the biggest growth drivers for the Gen z universe. Now purchasing a mobile phone on credit is the most important factor for them. Prior to Covid, it was the two-wheeler," says Bhavesh Jain, managing director and CEO of TransUnion CIBIL, India's leading credit information bureau said.

The other segment which has seen sharp growth for credit, is unsecured business loans, which has risen to 21% in March 2026, from 4% in March 2017.

Amongst credit active borrowers, consumption is the largest sector for loans at 51% in March 2026, compared to 34% in March 2017. Vehicle loans came in second at 18%, compared to 17% earlier, in the corresponding period. The share of new-to-credit borrowers has gone down to 13% from 32% in the same period. This indicates that the credit universe market is maturing, with lenders concentrating on existing customers rather than first-time borrowers.

For the mature credit active borrowers, gold loans and business loans show the highest demand.

But the overall pace of growth for credit penetration has moderated to 11% in March 2026 from 15% in March 2017, indicating a phase of rapid expansion to one which requires deliberate and targeted strategies, he said.

In terms of credit inclusion by region, Uttar Pradesh commands the highest 11% share in March 2026 (8% in March 2017), followed by Madhya Pradesh with 6% share (4% earlier) and Gujarat stable at 5% in both the corresponding periods of study.

Women now constitute nearly a third of the credit active consumers and the younger public constitute 39%. About 35% of this universe also do active credit monitoring themselves, the study shows.

"India's credit ecosystem has both diverged and deepened. The opportunity ahead lies not just in expanding access, but to ensure responsible growth, fostering financial awareness and leveraging innovation and inclusive credit experience," Jain told the media.

"The next phase of India's credit will be defined not just by scale, but the quality and depth of participation," he said.