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MumbaiOne hour ago
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Non-banking finance companies (NBFCs) are consistently lagging behind banks in some segments in terms of lending. According to broking company Emkay Global Financial Services, the main reason for this is the cheap loans being provided by banks.
Non-banking finance companies lagging behind banks
According to the report, banks are ahead of NBFC in auto and housing segment. The main reason for this is the cheap and long-term loans customers are getting from banks. Meanwhile, NBFC is constantly looking for opportunities in areas where banks do not have access. This includes vehicle finance, cheap homes and small MSMEs. Also focusing on the new credit segment to sustain growth.
Demand for loans increased in the category of affordable homes, vehicle loans and MSME loans
According to the broking company, the management and industry experts of NBFC expect that demand for credit has increased in all sectors. This includes new housing loans, especially in the category of affordable homes, vehicle loans and MSME loans.
Auto loan expected to increase with approval of scrap policy
Auto demand is expected to increase with the approval of scrap policy. Apart from the tractor segment, medium and heavy commercial vehicles have seen good recovery. Loans issued for two wheelers and three wheelers are unsecured, but after the policy, the number of customers taking loans in the sector is expected to increase.
The effect of RBI’s toughness also
One reason for NBFC lagging behind banks is the RBI’s strictness on companies, as it has been said to ban dividend payouts. The result will be a change in governance structure and transparency. This will also improve credit costs and cost of funds.