Despite a more cautious lending environment and stricter regulatory norms, India’s New-to-Credit (NTC) segment is seeing a significant surge. A recent report by CRIF High Mark reveals that the number of first-time borrowers has grown to 4.4 crore as of February 2026, up from 3.6 crore in 2022.
Key Trends in the NTC Landscape
The report highlights a shift in how Indians are entering the formal financial system, characterized by a more diverse borrower profile and a “calibrated” approach from lenders.
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Steady Growth: The NTC base has seen a 5.1% CAGR over the last four years.
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Lender Selectivity: While the volume of borrowers is up, their share in total loan originations has dipped from 23.5% to 17.8%, signaling that banks and NBFCs are being more selective about whom they fund.
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The Gender Shift: Women now represent 41% of NTC accounts, a sharp increase from 33% five years ago, reflecting deepening financial inclusion.
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Geographic Expansion: More than 50% of new originations are coming from outside the top 100 cities, highlighting the credit hunger in semi-urban and rural India.
Popular Entry Points for New Borrowers
For most first-time borrowers, small-ticket “lifestyle” or asset-backed loans serve as the gateway to formal banking.
| Loan Category | Significance for NTC Borrowers |
| Consumer Durable Loans | The #1 entry point (32% of accounts). Often used for electronics and appliances. |
| Gold Loans | A traditional favorite for quick liquidity in rural and semi-urban markets. |
| Two-Wheeler Loans | A major driver for younger borrowers (Age 18-25) seeking mobility for work. |
| Personal Loans | Popular among the 26-35 age group for various personal requirements. |
The Role of NBFCs vs. Banks
The data underscores the critical role that Non-Banking Financial Companies (NBFCs) play in financial deepening.
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NBFC Dominance: These institutions contribute over 60% of NTC accounts, leveraging their superior reach and specialized underwriting models.
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Bank Caution: Traditional banks remain relatively conservative, often preferring borrowers with an existing credit history (CTC – Credit to Credit).
Credit Behavior and Progression
One of the most encouraging findings of the report is the rapid improvement in the credit profiles of these first-time borrowers.
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Repayment Discipline: Approximately 67% of NTC borrowers transition to “low-risk” or “very low-risk” categories within just one year.
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The “Credit Ladder”: Borrowers typically follow a progression—starting with a small consumer durable loan, building a score, and eventually moving toward larger, more structured products like home or car loans.
Expert View: The NTC segment is no longer just a “risky” frontier; it is a scalable growth engine. As younger demographics enter the workforce, their disciplined repayment behavior is proving that calibrated lending to first-time borrowers is a sustainable model for India’s financial future.
