Growth rate of digital loans moderates in Q1FY26, says FACE report

The growth rate of digital loans sanctioned is moderating in India, with around 30 million loans disbursed in the first quarter of financial year 2025-26 (FY26), having a cumulative value of ₹43,019 crore.

 

This marks a 13 per cent rise in volume and 17 per cent in value in Q1FY26 — slower than the strong growth seen in Q1FY24 and Q1FY25, when volumes rose 34 per cent and 23 per cent, and values 33 per cent and 34 per cent, respectively.

 

Around 27 million loans were sanctioned digitally in Q1FY25, with a value of ₹36,888 crore. In Q1FY24, the number of loans stood at 22 million, with ₹27,577 crore in value, according to data from the Fintech Association for Consumer Empowerment (FACE).

 

The share of digital loans by value has grown from 12 per cent in FY23 to 20 per cent in Q1FY26. The volume share, however, has risen from 67 per cent in FY23 to 80 per cent in Q1FY26.

 

Banks’ share of loan value has declined from 72 per cent in FY23 to 58 per cent in Q1FY26. The volume contribution has also fallen from 16 per cent in FY23 to 8 per cent in Q1FY26.