CONNECT WITH US
Fintech

Fintech

NBFCs shift towards secured retail credit as microfinance loans decline

ET BFSI Fintech logo

Published on

Add as a preferred source on Google
NBFCs shift towards secured retail credit as microfinance loans decline

NBFCs are increasingly shifting towards secured retail lending, with credit to microfinance and self-help group loans declining at end-December 2025, while gold, housing and vehicle loans drove credit growth, the RBI said.

Non-banking financial companies are shifting towards secured lending options as credit to microfinance and self-help group (SHG) loans declined at end-December 2025, while gold loans , housing and vehicle loans continued to drive retail credit growth , the Reserve Bank of India said in its October Bulletin. “Credit to micro finance/ SHG loans declined in end-December 2025 reflecting regulatory guardrails and shifts by lenders toward secured lending options,” the central bank said in its review of the NBFC sector for 2025. The shift was visible even as retail credit remained a key driver of overall NBFC credit growth . The RBI said retail and industry sectors were the drivers of overall credit growth among NBFCs , with retail loans continuing to expand at a rapid pace given NBFCs’ expertise in the segment.

Within retail lending, gold loans gained prominence. 5 per cent of total incremental NBFC credit between December 2024 and December 2025, which the RBI attributed to higher eligible loan values supported by elevated gold prices. Housing and vehicle finance also remained important drivers of NBFC retail credit. 1 per cent. The broader shift towards secured retail products comes as NBFCs continue to see strong demand in segments where the underlying exposure is backed by an asset or collateral. The RBI stated that credit extended by NBFCs had exhibited robust expansion since August 2025, driven primarily by strong retail credit, with marked acceleration in segments such as housing and gold loans.


Source link
Related Topics:Fintech

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We TheMorningPulse.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It's possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.