Small-ticket consumer lending experienced strong growth during the festive period, with Bajaj Finance noting a 27% increase in loan volumes and a 29% surge in value compared to the previous year. Between September 22 and October 26, the non-bank lender disbursed approximately 63 lakh loans, indicating consistent demand for items like appliances and electronics. During this time frame, the company acquired 23 lakh new customers, 52% of whom were first-time borrowers, signaling an expansion of formal credit access beyond traditional urban consumers.
Industry experts and analysts attribute the rise in demand to recent policy changes that have boosted disposable incomes. Adjustments in GST rates for consumer durables and personal income tax slabs have made upgrades more affordable for middle-income households. This shift is reflected in consumer preferences, with financing for larger television models comprising 71% of TV loans, up from 67% in the previous period. Despite the shift towards higher-end products, the average loan amount decreased by approximately 6% due to lower GST rates on certain appliances, particularly televisions and air-conditioners.
While the festive season typically sees an increase in consumer credit, this year’s growth aligns with a broader trend in India’s retail credit market. Data from the RBI indicates double-digit growth in unsecured personal loans throughout FY26, even as lenders adopt a more cautious approach towards riskier segments. Bajaj Finance’s extensive network, spanning over 239,000 active distribution points across 4,200 towns and cities, has played a crucial role in driving growth in smaller regions where many borrowers are utilizing digital credit for the first time.
Observers in the industry emphasize that these figures underscore the significance of consumer spending in propelling India’s economic momentum. The robust demand from entry-level and aspirational buyers suggests an improvement in purchasing power at the mass-market level, not just limited to major metropolitan areas. However, concerns are raised regarding the significant rise in new-to-credit customers, necessitating close monitoring of repayment behavior as unsecured lending continues to expand rapidly.
For lenders, the festive quarter serves as a vital barometer of consumer sentiment. This season’s performance indicates that the future of India’s consumption growth will heavily rely on first-time borrowers entering the formal credit system, often commencing with smartphone EMIs or appliance upgrades. This transition could reshape the landscape of retail finance well beyond the festive season.