Mumbai: The Urban Cooperative Banking (UCB) sector is at a pivotal moment of digital transformation, as revealed by the inaugural Sahakaar Trends report, jointly released by the National Urban Cooperative Finance and Development Corporation (NUCFDC) and TransUnion CIBIL.
The report, launched at the 2025 Credit Conference, reveals that the UCB sector recorded ₹2.9 lakh crore in portfolio balances as of March 2025 – a 1.8x increase over the past five years, with 6% year-on-year growth.
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Designed as a data-driven benchmarking tool, Sahakaar Trends highlights how UCBs are emerging as catalysts of inclusive credit growth, particularly in semi-urban and underserved markets.
As India targets a $5 trillion economy, UCBs – with their trusted local reach and grassroots connections – are uniquely positioned to empower micro-entrepreneurs, women-led SHGs, self-employed youth, and first-time homebuyers.
The Sahakaar Trends report outlines key trends shaping the future of UCBs:
- Retail Credit Momentum: Housing loans grew at a CAGR of 19%, personal loans at 18%, and MSME retail business loans at 24% over five years.
- Gold Loan Boom: Despite representing just 4% of the portfolio, gold loans grew at a staggering 52% CAGR.
- First-Time Borrowers: 37% of commercial loan seekers were new-to-credit (NTC), reinforcing UCBs’ role in expanding access to formal credit.
- Women-led Credit Uptake: Women account for 71% of UCB housing loan customers, outperforming housing finance companies (57%).
- Youth Segment Potential: 28% of home loan originations came from borrowers aged 35 or below.
The Sahakaar Trends report also signals improved asset quality. As of March 2025, delinquency rates for loans below ₹1 crore fell to 1.4%, outperforming public sector banks.
Prabhat Chaturvedi, CEO of NUCFDC, said: “Sahakaar Trends is not just a report – it’s a roadmap for UCBs to transform through tech-led innovation while staying rooted in community trust.”
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The report calls for accelerated digital adoption through initiatives like Sahakar Credit Engine, real-time portfolio dashboards, and Aadhaar-based loan systems.
These tools, along with data-backed training via Sahakar Paathshaala, aim to modernize underwriting and risk management, empowering UCBs to thrive in India’s fast-evolving financial ecosystem.
