Consumer financing for electronics reached an all-time high of ₹1.19 lakh crore by May 2026. This trend follows sharp price hikes of 12-40% in smartphones and appliances, forcing more shoppers to rely on credit. Non-bank financial companies are driving this growth, though stricter lending standards are making credit harder to secure for some.
Consumer lending for durable goods in India has climbed to record levels as of May 2026, according to data from Equifax India. The total outstanding loan amount for this segment touched ₹1.19 lakh crore, up from ₹1.09 lakh crore in March 2026. This rise reflects a broader shift in consumer behavior where financing has become the primary method for purchasing electronics.
Why Electronics Costs Are Rising
Consumers are increasingly turning to credit to manage the impact of steep price hikes. Over the past six months, prices for smartphones, laptops, televisions, and air conditioners have jumped by 12% to 40%. These cost increases are largely due to rising prices for memory chips and raw commodities, partly driven by geopolitical tensions in West Asia that have disrupted global supply chains. As products become more expensive, buyers are opting for loan schemes to maintain their purchasing power.
The Role of NBFCs and Lending Trends
Non-bank financial companies (NBFCs) are playing a major role in this growth, particularly in smaller towns. By the end of May 2026, consumer durable loans disbursed by upper and mid-tier NBFCs rose by 42% compared to the previous year, reaching ₹68,814 crore. While this highlights strong demand, it also points to a change in the market structure. Financing is now backing approximately 67% of all smartphone sales. For companies like Bajaj Finance, this has translated into higher volume, with 16.4 million loans issued in the June quarter.
Despite the surge in activity, the lending environment is not without friction. Some consumers are finding it more difficult to obtain approvals as NBFCs tighten their risk management and lending norms. This shift is notable because while the financing tenure has extended by nearly three months, the ability of a consumer to access credit is becoming more dependent on stricter credit checks. Investors should track whether this increased reliance on credit continues if interest rates fluctuate or if household debt levels rise further. Additionally, the ability of manufacturers to pass on further commodity price increases will be a key factor in whether demand for these financed purchases remains steady or begins to cool.