India’s love for two-wheelers has found new fuel, credit. NBFCs are racing to capture a market that refuses to slow down.

Walk through any small-town showroom these days. People are booking bikes faster than ever, and most are using finance. The CareEdge Ratings report released in October 2025 said that India’s two-wheeler finance industry could grow by 18–19% in FY26.

NBFCs now dominate this space. Their total two-wheeler loan book rose from ₹74,000 crore in FY21 to ₹1,12,751 crore by March 2025, marking a 22% yearly growth. The surge mirrors broader growth trends in India’s bike loan market, with digital approvals and small down-payments drawing more buyers.

Why Are NBFCs Growing Faster Than Banks in Bike Loans?

NBFCs, non-banking financial companies, work differently from banks. They are faster, less formal, and closer to customers in smaller cities.

According to the same CareEdge study, the average bike loan size climbed from ₹86,111 in FY21 to ₹1,14,929 in FY25. Buyers are spending more on premium scooters and motorcycles now.

Details	FY21	FY25	Growth
Avg. Loan Size (₹)	86,111	1,14,929	Buyers shifting to bigger bikes
NBFC Loan Book (₹ crore)	74,000	1,12,751	22% CAGR
Expected FY26 Growth (%)	—	18–19	Steady expansion ahead

These numbers explain why NBFC expansion in two-wheeler financing sector continues even when other credit areas are slowing. Many buyers now skip banks entirely because NBFCs give quicker approvals.

What Made Regulators Warn NBFCs Earlier And How They Changed Course?

Back in October 2024, the Reserve Bank of India (RBI) asked NBFCs to slow down on “growth at any cost.” It was a warning after risky lending patterns emerged. Later, Moody’s Ratings (May 2024) predicted that NBFC profits might flatten over the next year.

So lenders changed their way. They tightened credit checks but didn’t stop lending. The move worked.

Year	Focus Area	Result
FY22–FY23	High volume lending	Loan defaults rising
FY24–FY25	Risk control	Better repayment rate
FY25–FY26 (expected)	Steady growth	18–19% projection

This balance between growth and caution made the India’s booming two-wheeler finance industry stronger than before.

What’s Powering the 18–19% Growth in Two-Wheeler Loans?

Data from the Ministry of Road Transport and Highways (MoRTH) shows that two-wheeler registrations rose from 1.48 crore in FY23 to 1.68 crore in FY25. The RBI’s Financial Stability Report (June 2025) also confirmed that NBFCs’ retail lending grew faster than banks.

Digital lending platforms like LoansJagat added to the rise by making bike loans easier for rural and semi-urban buyers. This shift shows the rising demand for motorcycle loans in India and explains why NBFCs are so confident about factors driving 18 to 19 percent NBFC growth.

Conclusion

In earlier years, regulators tightened NBFC norms after liquidity troubles like the IL&FS crisis (2018–19). Now, instead of restricting lending, the government supports controlled expansion. RBI’s capital rules and MoRTH’s registration tracking together create transparency that was missing earlier.

It feels like India’s lenders are learning. The growth looks strong, but more careful too. Maybe this time, they’ll get it right.

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