The slowdown in demand from the 18-35 age group contributed to the Credit Market Indicator (CMI) dropping to 98 in the first quarter of FY26, compared to the same period a year ago.
The CMI is a composite index that tracks the health of India’s credit market across demand, supply, consumer behaviour, and performance.
Share of total demand fell
Within younger consumers, the share of total demand fell to 56 per cent during the June 2025 quarter, compared to 58 per cent a year ago. Enquiry volumes for personal loans, consumer durable loans, and gold loans remained strong, but credit card demand declined. Loan originations from younger borrowers in metros and urban areas have also dropped by three per cent over the past two years.
“The recent dip in credit demand from this segment may reflect a more cautious mindset. While this may be temporary, it is a reminder of how important it is to equip young borrowers with the right tools and support to help them grow confidently along their credit journey,” Jain said.
The report, however, noted that while demand from younger borrowers tapered, semi-urban and rural regions registered stronger momentum. Loan origination volumes in these geographies rose nine per cent year-on-year, providing a cushion to the overall market.
Rural and semi-urban markets saw the highest growth in personal loan originations at 15 per cent year-on-year, followed by consumer durable loans at 9 per cent and gold loans at 7 per cent. The share of these regions in total loan originations edged up to 61 per cent in the June quarter.
“Proactive portfolio monitoring in certain segments such as two-wheeler loans, unsecured business loans and commercial vehicle loans, along with strengthening risk frameworks, is essential for inclusive growth,” Jain added.
“India’s credit landscape is evolving with resilience in semi-urban and rural demand, a strategic shift toward secured lending, and stable portfolio performance. These trends signal a maturing market focused on sustainable and inclusive growth,” said Bhavesh Jain, MD and CEO, TransUnion CIBIL.
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