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Two-Wheeler Loans: More Experienced Borrowers Drive Growth
13 Oct
Summary
- Established credit borrowers now dominate two-wheeler loan originations.
- Asset quality improved as more credit-experienced individuals took loans.
- Lenders see opportunities for cross-selling due to borrower behavior.
In a notable shift, borrowers with established credit histories are now the primary recipients of two-wheeler loans. Data indicates that those with over two years of credit history constitute 43% of originations, a substantial increase from 2019. This trend is supported by an improvement in asset quality, as the delinquency rate for two-wheeler loans declined to 1.4% in Q4 FY26, a decrease of 128 basis points from 2019.
Consumer durable financing has emerged as a key entry point into formal credit, with many borrowers subsequently opting for two-wheeler loans. This evolving borrower demographic is also creating avenues for lenders to expand their offerings. The outstanding two-wheeler loan portfolio reached ₹1.76 lakh crore as of June 2026, reflecting a 3.2-fold increase since 2019, with NBFCs holding a dominant 73% share.
