In the last 10 years, the pattern of taking loans in India has changed a lot. A decade ago, agricultural loans and two-wheeler loans were the main entry points for first-time borrowers i.e. new-to-credit (NTC) customers, but now people are taking loans for consumer durables like mobile phones, fridges, washing machines for the first time. In such a situation, the question is whether a person is falling into the trap of EMI by spending on his hobbies and leisure?

According to a study by TransUnion CIBIL and the Finance Industry Development Council (FIDC), the share of NBFCs in loans to first-time borrowers touched 50% in the quarter ended June 2026. This share was only 24% in the same period of 2016. That means, in 10 years, the role of NBFCs in lending to NTC customers has more than doubled.

Now getting credit from phone and fridge is starting

NTC stands for New-to-Credit are customers who have no previous loan record with a retail credit bureau. For such consumers, consumer-sustainable loans have now become the largest means of entry into the formal credit system.

Between January and June 2026, consumer-durable loans accounted for 30% of NTC loans. This was followed by personal loans at 12%, gold loans at 11% and two-wheeler loans at 10%. The remaining 37% of loans were from other products.

It means that now the first time borrower need not take loan only for bike or agriculture. Buying everyday items like mobile, fridge, washing machine on EMI is also the beginning of their formal credit journey.

The first step of credit was related to agriculture 10 years ago

The picture was completely different in the first half of 2016. At that time Kisan Credit Card was the largest product in NTC Loans. Its share was 18%. After this, agriculture loans were 11%, two-wheeler loans 10%, gold loans 8% and consumer-durable loans only 6%.

That means that both the need for credit and the products to meet it have changed in 10 years. Earlier it was more common to take loans for big expenses like agriculture and vehicles, but now even small ticket size consumer loans are connecting large numbers of people to the formal credit system.

Phone EMI is becoming a medium of credit entry

According to Bhavesh Jain, Managing Director and Chief Executive, TransUnion CIBIL, phone financing is the fastest growing segment of consumer-durable credit.

Young borrowers often buy mobile phones first, he says. In such a situation, phone EMI can be an easy way for them to enter the formal credit system.

About 46% of credit extended to Generation Z borrowers in the first half of 2026 came from NBFCs. However, it is not possible to separately identify loans taken for phones in CIBIL data. Hence, the growth of phone lending is estimated based on the size of the loan ticket.

Maximum loan amount less than 50 thousand

Another indication of the growing trend of consumer-durable loans is their small ticket size. In the quarter ending June 2026, consumer-durable loans at Rs. The share of loans below 50 thousand was 93%.

Compared to the quarter ended June 2019, the number of such loans has increased by 2.6 times. This means that a large portion of consumer loans are being taken not for major expenses, but for the purchase of small and everyday items.

The hold of NBFCs in the credit market has increased

According to the study, NBFCs accounted for 43% of the total number of retail loans in the quarter ended June 2026. Their share in terms of value ie total loan amount was 30%.

In the same period of 2016, the share of NBFCs was 33% in terms of number and 22% in terms of value. It means that the reach of NBFCs in the retail credit market has increased in the last 10 years.

According to Raman Aggarwal, Chief Executive, FIDC, NBFCs’ 50% share of NTC customers shows that they are playing a major role in connecting people with the formal financial system. With the help of this, customers can build their credit record and become eligible to take loans from the bank in future.

Is the rising trend of EMIs also increasing the debt burden?

The increase in loan coverage also means that more people are using EMI products, but the common man cannot be said to be burdened with debt just because of the increase in NTC and consumer-durable loans. However, it is certain that the currency of purchasing goods through EMI has definitely increased.

The report sees the growing share of NBFCs and the expansion of small consumer loans as the changing pattern of the credit system. At the same time, experts point to the growing need for phones after the pandemic and improvements in public transport as possible reasons for the change in loan patterns among young people.