NBFC credit grows 14.2 percent in May, retail leads expansion

Non-banking financial companies (NBFCs) experienced a year-on-year credit growth of 14.2 percent in May 2026, marking an acceleration from the 11.4 percent recorded a year prior.

This expansion was notably robust in agriculture and allied activities, which saw a significant increase of 17.9 percent compared to 5.0 percent in May 2025.

In contrast, credit to the industry sector grew at a more subdued pace of 7.3 percent, down from 10.0 percent a year ago.

This moderation in industrial credit growth was primarily influenced by weaker performance in the infrastructure segment, a major component within the industry sector, indicating a shift in lending focus or demand within the broader economy.

The services sector also saw moderated credit growth, registering 16.7 percent year-on-year in May 2026, a decrease from 23.9 percent in the previous year.

Despite this overall moderation, credit to 'Commercial Real Estate' within the services sector demonstrated a buoyant expansion, suggesting specific pockets of strength.

Retail loans emerged as the strongest contributor to the overall NBFC credit growth, achieving a 19.5 percent year-on-year increase in May 2026, up from 14.9 percent a year ago.

Key segments within retail lending, such as 'housing loan', 'vehicle loan', and 'loans against gold jewellery', all exhibited robust growth during the month, reflecting strong consumer demand.