Personal loan sanctions surge to Rs 2.99 trillion in Q1 FY27

The digital lending sector has demonstrated robust growth momentum, with non-banking financial companies sanctioning Rs 2.99 trillion in personal loans during the April-June 2026 quarter, according to data from the Federation of All India Credit Entities (FACE).

The quarter witnessed approval of approximately 3.4 crore individual loan applications, underscoring the growing reliance on formal credit channels among Indian consumers. The high volume of sanctions reflects sustained demand for retail credit despite prevailing macroeconomic conditions.

Average loan ticket sizes remained modest at approximately Rs 19,000, indicating that small-value borrowing continues to dominate the digital lending landscape. This trend underscores the sector's focus on serving middle and lower-middle income borrowers seeking short-term credit solutions.

The growth in personal loan sanctions highlights the expanding reach of digital NBFCs in India's credit ecosystem. These platforms have leveraged technology and simplified application processes to capture market share from traditional lending institutions, particularly in tier-2 and tier-3 cities where banking infrastructure remains limited.

The continued expansion in personal loan sanctions suggests healthy consumer confidence and sustained credit demand as the fiscal year progresses, though lenders remain cautious about credit quality in an increasingly competitive market.