Retail and Agriculture Loans Propel NBFCs' Credit Surge in 2026

In May 2026, NBFCs' credit growth rose to 14.2%, spurred by retail and agricultural loans, according to RBI. Retail loans saw a 19.5% increase, while agriculture credit jumped 17.9%. Despite industrial and services credit slowing, commercial real estate showed robust growth, maintaining a positive trend for NBFCs.

Credit extended by non-banking financial companies (NBFCs) surged by 14.2 percent in May 2026, compared to the previous year's 11.4 percent, driven significantly by the retail and agricultural segments. This marks a noteworthy shift as retail loans and agriculture credits spearhead the overall growth, revealed the Reserve Bank of India's statement.

Notably, the credit to agriculture and allied sectors recorded a substantial rise, escalating by 17.9 percent compared with figures from the previous year. This rise underlines an increased emphasis on farm sector financing, reinforcing the importance of agricultural lending in the current economic landscape.

Retail loans emerged as the leading growth driver for NBFCs, enjoying a 19.5 percent year-on-year growth, up from 14.9 percent in May 2025. The retail sector's credit expansion was marked by significant contributions from housing loans, vehicle loans, and loans against gold jewelry, indicating strong consumer demand.

Conversely, industrial credit growth decelerated to 7.3 percent from the prior year's 10 percent, mainly due to a slowdown in infrastructure lending. Additionally, credit growth in the services sector moderated to 16.7 percent from 23.9 percent year-on-year, although commercial real estate displayed robust growth trends, according to the RBI release.