UCBs Eye Inclusive Growth With Tech Push: NUCFDC & TransUnion CIBIL Release ‘Sahakaar Trends’ Report

The National Urban Cooperative Finance and Development Corporation (NUCFDC), in collaboration with TransUnion CIBIL, released the inaugural edition of the Sahakaar Trends report at the 2025 Credit Conference, offering key insights into the evolving performance and potential of India’s Urban Cooperative Banks (UCBs).

According to the report, as of March 2025, UCBs’ portfolio balances reached ₹2.9 lakh crore, reflecting a 6% year-on-year (YoY) growth and a 1.8x increase over five years since March 2020. With double-digit growth across key product categories—especially housing, personal, gold, and retail business loans—the report positions UCBs as pivotal drivers of financial inclusion.

Digital Transformation the Next Frontier

The Sahakaar Trends report urges a tech-led overhaul of UCB operations, noting that digitization, improved risk management, and automation tools can enhance competitiveness. Initiatives such as Sahakar Credit Engine, Sahakar Paathshaala, and real-time risk dashboards are expected to catalyze this shift, helping UCBs deliver faster, smarter services.

“UCBs have long been pillars of trust and grassroots accessibility. Today, backed by data-driven insights, digital tools, and institutional support, they are poised to lead a new era of inclusive financial growth,” said Mr. Prabhat Chaturvedi, CEO, NUCFDC.

RBI Data Supports Sector Strength

Citing the Reserve Bank of India’s recent Financial Stability Report, the study highlights that credit growth in primary UCBs rose to 7.4% YoY in March 2025. The sector’s Capital to Risk-Weighted Assets Ratio (CRAR) now stands at 18.0%, while gross NPAs have dropped to 6.1% and net NPAs to just 0.6%, reflecting improving asset quality.

Loan Trends Signal Deepening Market Reach

• Commercial Loans remain dominant (28% of total), but grew modestly at 3% CAGR. Notably, 37% of borrowers are new-to-credit.

• Housing Loans saw 19% CAGR, now 14% of the portfolio. Enquiries rose 2.8x over five years, driven by semi-urban demand and rising trust.

• Personal Loans and Gold Loans registered 18% and 52% CAGR, respectively.

• Retail Business Loans, a key MSME segment, grew at 24% CAGR, forming 12% of the portfolio.

• UCBs have also outperformed PSU banks in controlling delinquencies, with sub-INR 1 crore exposure NPAs falling from 3.5% to 1.4%—a stronger credit discipline indicator.

Financial Inclusion, Youth and Women at the Forefront

The report spotlights enhanced gender inclusion—71% of UCB housing loan customers are women, compared to 57% in HFCs. Moreover, 28% of home loan originations come from borrowers aged 35 and under, and 20% from new-to-credit customers, signaling future potential for digitally tailored offerings.

With close to 9 crore Indians served and a strong foothold in both metro (42%) and rural (22%) markets, UCBs are increasingly viewed as catalysts in India’s $5 trillion economic ambition.

As the Indian banking sector eyes an 11.5% annual growth till 2030, Sahakaar Trends offers a timely roadmap to empower UCBs to evolve into agile, future-ready institutions, blending legacy strength with digital sophistication for inclusive, sustainable growth.