Digital non-banking lenders have grown their loan books to Rs 1.54 lakh crore by favoring larger ticket sizes. While this improves revenue, the shift toward higher-risk borrowers and young demographics, coupled with stricter regulatory oversight on consumer credit, makes asset quality the key trend for investors to track.
Digital-first non-banking financial companies (NBFCs) in India are rapidly changing their strategy, moving away from high-volume, small-ticket lending to focus on larger personal loans. By the end of June 2026, the outstanding portfolio for these digital lenders grew by 28% to reach Rs 1,54,195 crore, up from Rs 1,20,122 crore in the previous year. This growth is notable because it happened even as the total number of accounts fell slightly to 5.64 crore, meaning lenders are choosing to serve fewer customers with much larger loan amounts.
The average outstanding balance per customer has climbed by nearly 30% to roughly Rs 27,350. This change suggests that digital lenders are trying to get more value out of their existing user base rather than simply acquiring new, small-ticket borrowers. In the June quarter alone, these companies sanctioned Rs 64,656 crore in new loans, a 50% jump compared to last year. A significant portion of this growth—about 60% of the total value—comes from loans larger than Rs 50,000.
While this strategy helps drive up loan book numbers, it introduces a different risk profile for the sector. Digital lenders are increasingly serving customers that traditional banks typically avoid. Data shows that 29% of the loan value sanctioned by these digital NBFCs goes to borrowers with high or very-high credit risk scores. In contrast, this high-risk segment accounts for only 9% of sanctions at traditional banks. Furthermore, there has been a massive surge in lending to younger populations under 25 and borrowers with very limited credit history.
For investors, the primary concern is how these assets perform over time. The sector is currently navigating a stricter regulatory environment. The Reserve Bank of India (RBI) has previously raised concerns about the growth of unsecured retail credit, leading to higher capital requirements—known as risk weights—for consumer loans. This means lenders must set aside more capital for every loan they issue, which can put pressure on profit margins. While delinquency rates for loans 90 to 180 days overdue improved to 1.4% from 2.5% last year, the true test of this strategy will be how these higher-risk loans behave during an economic slowdown.
Investors should closely monitor the asset quality of these portfolios in upcoming quarters. Because these lenders are expanding heavily into Tier III cities and targeting riskier borrower segments, the ability to maintain current collection efficiency will be critical. Any sign of rising defaults, especially in the high-risk segments that form a large part of their sanction value, could lead to increased provisioning costs and tighter liquidity for these companies.