NBFCs in India Hope for Better Financial Inclusion and Digitalization in Upcoming Budget
New Delhi [India], July 14: Ahead of the Union Budget scheduled for July 23, the Non-Banking Financial Company (NBFC) sector is anticipating enhanced financial inclusion and digitalization efforts to sustain growth. The Finance Industry Development Council (FIDC) has suggested establishing a special refinancing body, similar to the National Housing Bank (NHB) for housing finance companies.
This year, the sector has faced stringent regulatory actions from the Reserve Bank of India (RBI). In May, RBI Deputy Governor Swaminathan J cautioned NBFCs against over-reliance on algo-based credit models. However, the RBI’s 29th Financial Stability Report (FSR) noted that NBFCs are well-capitalized, with a CRAR of 26.6%, a GNPA ratio of 4.0%, and a return on assets (RoA) of 3.3% as of March 2024.
Rakesh Kaul, CEO of Clix Capital, emphasized the importance of financial and digital inclusion for the sector’s growth. Jitendra Tanwar, Managing Director & CEO of Namdev Finvest Pvt Ltd, echoed this sentiment, highlighting the need for government incentives to promote global integration and sustainable growth.
Krishan Gopal, CFO of Aye Finance, expressed confidence in the budget, expecting it to support NBFCs transforming micro-enterprise lending. Mathew Muthoottu, MD of Muthoottu Mini Financiers Ltd, called for policies promoting responsible credit utilization and financial literacy.
Neha Juneja, Co-founder and CEO of IndiaP2P, hopes the budget will include provisions to spur consumption and support NBFCs serving priority sector clients. Pavitra Walvekar, CEO of Kudos Finance, anticipates additional funds to improve liquidity and regulatory reforms to enhance transparency and credit availability for underserved segments like MSMEs.
