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How NBFCs are back in the count | Financial News
Non-banking financial companies (NBFCs) credit is expected to cross the Rs 50 trillion mark in FY25. The sector has weathered the after-effects of the pandemic, according to an ICRA-ASSOCHAM report. While growth remained below its all-time highs, it was healthy given the expanded base. NBFCs, excluding housing finance companies and NBFC-Infra, will continue to expand at a higher pace, driven by growth in retail assets. The key, however, is access to finance to meet growth projections, even as the target segments of NBFCs remain largely underserved by credit. The opportunities for NBFCs have undergone a dramatic shift. The considerable pent-up demand for credit post-pandemic has resulted in strong credit expansion, especially in the retail segments. At the structural level, during 2010-20, NBFCs targeted asset-backed lending and steadily built their franchises. Over time, improved credit bureau data and a better understanding of borrowers’ cash flows helped them adjust their underwriting processes.