NBFC credit growth led by services, retail; power sector share moderates in FY25

Reserve Bank of India

Non-banking financial companies (NBFCs) continued to expand credit at a strong pace in the financial year 2024-25, with industry and retail together accounting for over four-fifths of total lending, while services emerged as the fastest-growing segment, according to the Reserve Bank of India’s (RBI) Trend and Progress of Banking in India 2024-25 report.

As of end-March 2025, industry and retail loans together made up 81.32 percent of total NBFC credit, followed by services at 15.4 percent. Credit to services recorded a sharp rise of 29.8 percent year-on-year, significantly outpacing growth in industry and retail loans, which also expanded in double digits during the period.

Within industry, the power sector remained the largest recipient of NBFC credit, though its share moderated to 56.1 percent at end-March 2025 from 58.2 percent a year earlier. Overall credit to industry rose to Rs 22.91 lakh crore at end-March 2025 from Rs 19.4 lakh crore a year ago.

Services credit increased to Rs 7.44 lakh crore at end-March 2025, driven by strong growth in sub-sectors such as trade and transport operators.

Retail loans also continued to grow at a healthy, reaching Rs 16.32 lakh crore, although the pace moderated compared with earlier years following the increase in risk weights on select retail loans announced in November 2023.

Within retail, vehicle and auto loans as well as advances to individuals against gold saw steady expansion, while microfinance and self-help group loans witnessed some moderation. Total gross advances by NBFCs rose to Rs 48.39 lakh crore at end-March 2025 from Rs 40.53 lakh crore a year ago.