Jio Financial sets secured-first lending plan for 2026

Secured lending first, unsecured later

Jio Credit, the NBFC arm of Jio Financial Services, plans to build its loan book mainly through secured products before moving meaningfully into unsecured retail segments. Managing Director and CEO Hitesh Sethia said the company will evaluate unsecured lending “in due course” after reaching a “certain critical mass”. The approach is a contrarian one in a market where several lenders expanded first in unsecured credit and later shifted towards secured products. Sethia linked the strategy to building a stronger balance sheet and a profit and loss profile that can absorb risk over time. He also indicated that unsecured businesses can be margin-accretive but need the right scale and risk capacity. For now, Jio Credit sees “enough runway” within secured lending.

Why the company is taking a contrarian route

Sethia said Jio Financial is starting with secured lending to build what he described as a strong balance sheet before “gradually” expanding its risk appetite. He tied this to the company’s brand, capital base, and ecosystem distribution advantage. The management’s reasoning is that early-stage balance sheet growth should avoid segments that typically see higher default rates. In the same interaction, Sethia contrasted unsecured credit stress with lower stress in home loans and similar secured products. The company’s current posture also reflects a desire to grow within defined risk limits rather than chase quick expansion. This is relevant in an environment where regulators have increased scrutiny around unsecured lending in recent periods.

Cost of funds and margins: what Jio Credit disclosed

Jio Credit is a AAA-rated NBFC, and Sethia said its cost of funds is around 7%. He described this as best-in-class and said it supports margins even in secured products. According to him, Jio Credit has reported net interest margins (NIMs) north of 3%. He added that as leverage rises, NIMs are expected to move more in line with the broader market. The company’s stated edge is the cost-of-funds advantage, which it believes can help sustain spreads during scaling. The margin commentary matters because secured products are often viewed as lower-yielding than unsecured credit, but Jio Credit is positioning its funding cost as an offset.

How Jio Financial is present in unsecured credit without taking direct risk

Even while holding back on direct unsecured expansion through the NBFC, Jio Financial is using its marketplace model to stay present in the segment. Sethia said the company launched its “Neural Agentic Marketplace” in February. On the JioFinance app, users can access personal loans and credit cards offered by other institutions, with the platform matching users to products. The company said it is seeing good traction and that conversational interfaces and tailored suggestions are helping engagement. This structure allows Jio Financial to distribute products where it does not yet have a risk appetite, while keeping direct balance sheet exposure aligned to its current strategy. Sethia said that where the company does have risk appetite, it will continue to operate through the NBFC.

Product pipeline, credit cards constraint, and distribution footprint

Sethia said the company currently has around 50 credit cards available on the platform and “half a dozen” unsecured loan products, with business loans in the pipeline. He also clarified a regulatory constraint: as an NBFC, Jio Credit cannot issue credit cards because the RBI does not grant those licences to NBFCs. Separately, another company update on the app said it has tied up with over 50 credit cards and 90 insurance products to be made available on the platform.

On physical distribution, Sethia said the company plans to be present in the top 20 cities and is currently in 18 cities with 24 offices. Distribution will expand slightly, and the company will evaluate progress every quarter. He also said the focus is to go deeper into the existing product set before widening the risk appetite.

Reinsurance licence and the broader insurance roadmap

On reinsurance, Sethia said the company received regulatory approvals and a licence in March. He said the business effectively started toward the end of March, or on April 1. Jio Financial is also working towards launching both general and life insurance businesses, with timelines dependent on regulatory approvals. Sethia said the target is to begin insurance manufacturing in 2026. The plan builds on the company’s move into reinsurance through a joint venture with Allianz, and he indicated the same partnership is likely to extend into other insurance segments.

GIFT City fund plan and SEBI-filed product rollout

Sethia said SEBI filings reflect the 13 to 14 products the company has launched. He added that over time the company will evaluate all distribution channels. He also said GIFT City initiatives are underway, with certain approvals already in place. Jio Financial is progressing toward launching a GIFT City fund to enable Indians to invest in overseas markets. He described the next step in one initiative as moving to a binding agreement, followed by a regulatory licence process, after which the business can be launched once approvals are received.

What analysts are modelling for Jio Financial’s growth

Motilal Oswal Financial Services initiated coverage with a BUY rating and a target price of INR 320, modelling consolidated profit after tax (PAT) CAGR of 48% over FY26 to FY28. It expects Jio Credit to be the primary growth engine and models AUM CAGR of around 90% between FY26 and FY28. The report also models Jio Credit PAT CAGR of about 152% over FY26 to FY28 as the portfolio scales. It highlighted a secured-product-led ramp-up in home loans, loans against property, and loans against securities, alongside expansion in corporate and supply-chain finance to diversify the book. The brokerage note also referenced capital strength, including a preferential issue of warrants expected to inject roughly INR 157 billion in equity.

Key numbers at a glance

Market impact and why the sequencing matters

The secured-first strategy reduces near-term credit volatility, especially when unsecured portfolios can see higher default rates, as Sethia noted. At the same time, Jio Financial is using the JioFinance app to distribute third-party personal loans and credit cards, keeping customer engagement in high-demand products while limiting direct risk. The marketplace structure also supports a platform-led distribution model, which is central to the company’s broader strategy after its August 2023 listing.

On the funding side, management’s disclosures on a ~7% cost of funds and NIM above 3% provide a framework for how it is thinking about profitable growth during the build-out. And on the non-lending roadmap, the reinsurance licence in March and the stated ambition to begin insurance manufacturing in 2026 show the company is attempting to add regulated, longer-cycle businesses in parallel with lending.

Conclusion

Jio Financial’s near-term plan for Jio Credit is anchored in secured lending, with unsecured retail to be considered after the business reaches a critical mass and expands its risk appetite. In the interim, the company is staying active in unsecured products through its marketplace partnerships on the JioFinance app. On the expansion front, the company has outlined distribution across top cities, the start of reinsurance operations around late March or April 1, and a target to begin insurance manufacturing in 2026, subject to regulatory approvals.