Women drive surge in first-time borrowers as India’s new-to-credit base hits 4.4 crore: Report

India’s expanding base of first-time borrowers is being increasingly powered by women, even as lenders adopt a more cautious approach to credit disbursal, according to a report by CRIF High Mark.

The report highlights a significant rise in women’s participation in the new-to-credit (NTC) segment, with their share climbing from 33 per cent to 41 per cent over the past five years. This shift reflects deeper financial inclusion and a growing wave of women-led entrepreneurship across the country.

Overall, India’s NTC borrower base has grown to 4.4 crore in the 12 months ending February 2026, up from 3.6 crore in the corresponding period of 2022, registering a compound annual growth rate of 5.1 per cent.

Despite tighter underwriting standards by financial institutions, first-time borrowers continue to play a critical role in credit expansion. They accounted for 17.8 per cent of total borrowers originating loans during the period, although this share has declined from 23.5 per cent in 2022, signalling a more calibrated, risk-aware lending approach.

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Non-banking financial companies (NBFCs) remain the dominant drivers of NTC lending, contributing over 60 per cent of total accounts, while banks continue to be relatively conservative in onboarding new borrowers.

Consumer durable loans have emerged as the primary gateway into formal credit, accounting for 32 per cent of NTC accounts. These are followed by gold loans and two-wheeler financing, indicating a preference for small-ticket, asset-backed credit among first-time borrowers.

The report also identifies a clear borrower lifecycle pattern. Individuals typically begin with smaller loans and gradually transition to more structured credit products as their credit history strengthens.

Demographically, borrowers in the 26–35 age group account for the bulk of loan originations across categories. Meanwhile, younger consumers dominate segments such as personal loans and two-wheeler financing.

Geographically, the expansion of first-time borrowers is being led by semi-urban and rural India. More than half of NTC originations are now coming from markets beyond the top 100 cities, underlining the deepening reach of formal credit.

Importantly, credit behaviour among new borrowers is also improving. Nearly 67 per cent of NTC customers transition into low-risk or very low-risk categories within a year of entering the formal credit system, indicating strong repayment discipline when supported by appropriate product design and prudent lending practices.

The report underscores that while lenders are becoming more selective, the NTC segment continues to offer scalable and sustainable growth opportunities, particularly among women, younger borrowers, and emerging geographies.