Credit growth at non-banking financial companies (NBFCs) accelerated sharply in July 2026, with overall credit outstanding rising 14.9% year-on-year, compared with 10.6% a year ago, according to data released for the month ended July 31, 2026. The acceleration was led by strong growth in retail lending, particularly housing loans and loans against gold jewellery. Retail credit growth accelerated to 21.4% in July from 13.7% a year earlier.
Retail loans emerged as the key growth driver for NBFCs during the month, with credit growth accelerating by nearly 8 percentage points year-on-year. Within the retail segment, housing loans and loans against gold jewellery recorded accelerated growth. Vehicle loans, meanwhile, continued to maintain steady growth.
The strong performance of gold-backed lending comes amid increased demand for loans against gold jewellery, while housing credit also remained robust.
Credit to agriculture and allied activities recorded robust growth of 18% year-on-year in July 2026, significantly higher than the 5.4% growth recorded a year ago. The sharp improvement indicates stronger credit demand from the agriculture and allied activities segment and contributed to the overall acceleration in NBFC credit growth.
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Credit to industry grew 7.4% year-on-year in July, slowing from 9.3% in July 2025. The moderation was primarily driven by subdued credit growth in infrastructure, which is a major constituent of the industrial credit segment.
The slower growth in industrial lending contrasts with the acceleration seen in retail and agriculture credit, indicating that NBFC credit expansion remains tilted towards consumer and certain secured lending segments.
Credit growth in the services sector moderated to 15.2% year-on-year in July 2026 from 24.5% a year earlier. While credit to commercial real estate continued to register buoyant expansion, growth in the trade and transport operators segments decelerated.
The moderation in services credit was therefore broad enough to offset some of the momentum from retail and agriculture lending.
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