MFI constitute the largest share of lending portfolio in June 2026
This share stayed at around 36% to 38% between June 2022 to June 2025, making this the most significant increase in five years
In June 2026, microfinance institutions (MFIs) accounted for the largest portion of the loan portfolio, comprising 43% of the ₹3.3 lakh crore lending balance, according to Transunion CIBIL data. This represents a significant increase from the 36% to 38% range observed between June 2022 and June 2025, marking the most substantial rise in lending from MFIs in the past five years.
The next most preferred lending source for borrowers was Non-Banking Financial Companies (NBFCs), whose share grew to 15% from 10% over the same period. Small Finance Banks (SFBs) maintained a steady presence at around 16% of the total loan portfolio. Conversely, the share of traditional banks in the lending portfolio decreased notably, falling to 27% in June 2026 from 34% in June 2025, which itself had been lower than the 35% in June 2024.
Despite this shift, the overall number of credit active borrowers decreased to 6.5 crore in June 2026, down from a six-year high of 8.6 crore between June 2019 and June 2024. Interestingly, this change in lending preference was observed even as the overall number of credit active borrowers declined. The report by CIBIL noted that borrowers in recent years have been migrating their credit needs from northern states like Bihar and Uttar Pradesh to Tamil Nadu.
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