India’s credit landscape is witnessing a significant shift, while industrial and vehicle financing continue to gain momentum, unsecured consumer lending is showing visible signs of moderation. The latest trends reveal how evolving consumer behavior, lender caution, and changing borrowing priorities are reshaping the country’s financial ecosystem.
In today’s edition of our monthly Outstanding Deposits & Loans track, we cover the key highlights for the month of Mar’26.
Credit to the industrial sector maintained relatively stable growth at 15.0% Y-o-Y in Mar’26, above the 8.2% recorded a year earlier. Within this sector, micro and small enterprises showed improved momentum with 33.1% growth, outpacing the overall industrial credit expansion.
The sharp slowdown in credit card outstanding growth to 3.5% Y-o-Y in Mar’26 from 10.6% in the prior year, alongside the collapse in consumer-durable loan dipped to -5.3% from -1.0%, signals a clear pullback in discretionary, unsecured consumption credit. This reflects a structural tightening in household leverage, where consumers are increasingly avoiding EMI-led big-ticket purchases and revolving credit, likely due to higher perceived debt risk, elevated interest costs, and tighter lender underwriting.
India's consumer credit market demonstrates robust expansion, growing 16.2% Y-o-Y to reach INR 69.4T in Mar’26. Vehicle loans lead with the highest growth rate (18.6%), followed by educational loans (13.4%), while housing loans (11.5%) show strong performance.
The credit portfolio remains dominated by housing loans at almost 50%, reflecting the continuing importance of real estate in Indian household assets. The expansion across most lending categories points to healthy consumer confidence and financial inclusion, though the credit portfolio shows Indians prioritize long-term investments in education and housing over consumer durables.