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NBFCs seen growing at 10-12% this fiscal
December 15, 2022
Led by retail-focused players, non-banking financial companies (NBFCs) are likely to close the current fiscal and the next with loan growth of 10-12 per cent and see around 50 basis points improvement in profitability, a report said.
According to ICRA Ratings, retail-focused NBFCs are expected to grow 12-14 per cent while the housing finance companies may grow by 10-12 per cent. The forecast is based on the asset quality improvement and the overall pick-up in credit demand.
However, microfinance and personal loans, which together constitute a quarter of the ₹25-lakh crore shadow banking sector, will continue to grow at a high pace.
Sectoral profitability will improve by 40-50 basis points (bps) this fiscal, supported by stable margins and lower credit cost, and will reach the pre-pandemic levels, the report said.
While growth will be broad-based across various sub-sectors, microfinance and personal loans will be leading the growth chart. On the other hand, vehicle financing loans (commercial vehicle finance, passenger vehicle finance), which have remained significantly subdued since FY20, are also expected to report higher growth numbers, following an improvement in the operating environment.
According to ICRA Ratings, retail-focused NBFCs are expected to grow 12-14 per cent while the housing finance companies may grow by 10-12 per cent. The forecast is based on the asset quality improvement and the overall pick-up in credit demand.
However, microfinance and personal loans, which together constitute a quarter of the ₹25-lakh crore shadow banking sector, will continue to grow at a high pace.
Sectoral profitability will improve by 40-50 basis points (bps) this fiscal, supported by stable margins and lower credit cost, and will reach the pre-pandemic levels, the report said.
While growth will be broad-based across various sub-sectors, microfinance and personal loans will be leading the growth chart. On the other hand, vehicle financing loans (commercial vehicle finance, passenger vehicle finance), which have remained significantly subdued since FY20, are also expected to report higher growth numbers, following an improvement in the operating environment.
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