MUMBAI, April 14 -- Digital lending firms regained some momentum in FY26, as unsecured lending picked up and growth stabilized after a regulatory-led slowdown the previous year, industry executives and analysts told Mint.

The rebound follows a muted FY25, when tighter regulations, rising costs and weakening credit quality sharply slowed expansion. Loan growth, for non-banking finance companies (NBFCs) with assets under management (AUM) below Rs.15,000 crore, fell to about 13% in FY25 from around 36% a year earlier, according to a November 2025 report by Icra Ltd, as unsecured lending and microfinance segments contracted. Growth is expected to have recovered to 16-18% in FY26.

The recovery was led by unsecured personal loans, which forme...