NBFCs must focus on diversification of products, funding profile, says Crisil
₹12.3 trillion as of September. Crisil noted that strategic co-lending and debt capital funding would be crucial for NBFCs to secure stable funding. Meanwhile, RBI governor Shaktikanta Das said at an event on Wednesday that NBFCs should try to broadbase their funding sources and reduce overdependence on banks.
As per Crisil, the share of bank borrowings has been increasing in recent years, and over the last five fiscals, bank loans to NBFCs logged a compound annual growth rate (CAGR) of 18% and stood at ₹12.3 trillion as of September. “To ensure access to consistent and stable funding, we expect NBFCs to consciously diversify their resource mix and increase share of avenues like securitisation and debt capital funding. Focus on co-lending and direct assignments for capital-efficient growth is expected to continue," said Sitaraman of Crisil.
Last week, RBI raised risk weights on personal loans, credit cards and bank loans to non-banks, a move expected to impact non-bank financiers more. “The recent regulatory measures are targeted at unsecured retail loans and do not impact the secured asset classes where growth is expected to be steady. Importantly, the regulatory changes do not impact HFCs (housing finance companies)," said Gurpreet Chhatwal, managing director, Crisil Ratings.
As per Crisil, the two largest traditional segments of home loans and vehicle finance now comprise 25-27% each of the NBFC AUM. Both segments are expected to report steady growth. In the home loan segment, growth of 12-14% next fiscal will be driven by housing finance companies' focus on affordable home loans — ticket sizes of less than ₹25 lakh — while vehicle finance is expected to grow 18-19% this fiscal and 17-18% next fiscal, on the back of
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