Mumbai: The TransUnion CIBIL Credit Market Report for September 2025 revealed contrasting trends in India’s retail credit landscape during the quarter ending June 2025.
While credit demand from younger consumers slowed, semi-urban and rural regions continued to show resilience, driving stability in the overall credit ecosystem.
According to the TransUnion CIBIL Credit Market Report, loan originations among younger consumers (18–35 years) grew only 6% year-on-year (YoY), down from 9% in the same period last year. However, this was offset by a 9% YoY rise in loan originations from semi-urban and rural geographies, underscoring robust consumption patterns beyond metros.
Also Read: TransUnion CIBIL Launches CreditVision CIBIL Commercial Rank to Transform MSME Lending
This divergence contributed to a lower Credit Market Indicator (CMI) of 98 in Q1 FY26 compared to the previous year. The CMI tracks demand, supply, consumer behaviour, and performance, providing a comprehensive view of credit market health.
“India’s credit landscape is evolving with resilience in semi-urban and rural demand, a strategic shift toward secured lending, and stable portfolio performance. These trends signal a maturing market focused on sustainable and inclusive growth,” said Bhavesh Jain, MD & CEO, TransUnion CIBIL.
TransUnion CIBIL Credit Market Report: Retail Credit Demand Impacted by Younger Consumers
The TransUnion CIBIL Credit Market Report noted that demand from younger borrowers fell to 56% of total demand in June 2025, compared to 58% a year earlier. The CMI for demand declined to 92 from 95 during the same period last year.
Personal loans, consumer durable loans, and gold loans remained popular among this age group, though credit card demand weakened. Originations from young consumers in metros and urban centres also declined by 3% over the past two years.
TransUnion CIBIL Credit Market Report: Rural and Semi-Urban Credit Growth Remains Strong
Semi-urban and rural loan originations increased 9% YoY in Q1 FY26. Personal loans in these markets posted the highest growth at 15% YoY, surpassing gold loans (7% YoY) and consumer durable loans (9% YoY).
The share of semi-urban and rural borrowers in overall loan originations rose to 61% in June 2025, reflecting expanding credit penetration.
Also Read: Credit Awareness Initiative by TransUnion CIBIL and Sa-Dhan to Empower Over 230 MFIs
TransUnion CIBIL Credit Market Report: Credit Supply and Lending Patterns
Credit supply, as measured by originations, remained flat with a CMI of 93. Personal loans (12% YoY) and gold loans (8% YoY) led growth, while two-wheeler loan volumes fell 1% YoY. Home loan originations saw modest improvement at 2% YoY in volumes and 6% YoY in value.
The Reserve Bank of India’s 50 basis point repo rate cut in June 2025, coupled with streamlined GST rates, is expected to boost consumer lending ahead of the festive season.
Secured Lending Gains Traction
Portfolio balances expanded at a slower 18% YoY, compared to 25% last year. Unsecured products such as personal loans and credit cards showed muted growth, while secured lending gained momentum. Loans against property rose 23% YoY and gold loans by 26% YoY, highlighting the lender pivot toward collateral-backed credit.
This contributed to a decline in the CMI for consumer behaviour to 94 from 111 last year.
Portfolio Performance and Emerging Risks
The CMI for performance improved to 104 in June 2025, reflecting stable portfolio quality. Personal loan delinquency rates declined, while credit card delinquencies rose marginally by 19 basis points.
Emerging stress was visible in two-wheeler loans (+20 bps), unsecured business loans (+42 bps), and commercial vehicle loans (+50 bps), together accounting for 6% of industry portfolios.
“Focused monitoring of segments showing early stress, such as two-wheeler and unsecured business loans, is critical for sustaining inclusive growth,” Jain added.
