"Retail credit growth of NBFCs is expected to remain at about 16-18 per cent for fiscal 2018 as competitive pressures increase and some key asset classes (LAP, microfinance) are likely to witness slower growth over the medium term than in the past," Icra said in a report today.
It said NBFCs profitability is expected to remain moderate in the current fiscal with return on equity at 10.5-11.5 per cent.
It said NBFCs are likely to raise more funds through market instruments.
Icra said cuts in marginal cost of fund based lending rate (MCLR) are expected to be transmitted to NBFCs over the fiscal 2018.
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