NBFC

Stricter lending norms adopted in face of slew of concerns will restrict asset growth OF NBFC-MFIs to 5 per cent in FY25, a report by Icra said on Thursday. Icra has assigned a negative outlook on the sector, given the significant near-term headwinds on growth, asset quality and profitability. The last two years had seen a robust expansion in assets under management for non-banking finance companies-microfinance institutions (NBFC-MFIs) but the same is set to moderate to 0-5 per cent in FY25, the report said. The agency attributed the fall in growth to challenges stemming from borrower over-leveraging, socio-political disruptions, and employee attrition-led operational challenges. The sharp increase in the overall overdue book in H1 FY2025 also poses a significant downside risks to the near-term loan quality of the sector, it said. The credit costs will increase to 5.4-5.6 per cent from 2.2 per cent in FY24 for NBFC-MFI entities, the agency said, adding that this, along with a ..

Asset quality concerns, slowing of bank funding to temper pace

Organisations assess other challenges, such as talent, transparency, and grievance redressal, as negligible risks in their operations

There are two ways of looking at this problem - first, has the composition of reported income changed? And second, has the composition of assets changed?

The guidelines mandate minimum annual dividend payout at 30% of PAT or 4% of net worth, whichever is higher

India's top lender is raising the facility for general corporate purposes through its branch at the Gujarat International Finance Tec-City

The RBI recently took a firm stance by halting the loan disbursement activities of four entities cited above with effect from October 21

Driven by cash flow disruptions, challenges seen in unsecured segments

Earlier this month, the RBI barred four NBFCs, including two MFIs, from sanctioning and disbursing loans due to charging exorbitant interest rates to borrowers

Regulatory warning, tight funding influence strategy

Ban includes 2 micro lenders, comes into effect from October 21

Private sector NBFCs raise Rs 1.91 trillion in H1FY25

Regulator closely monitoring situation and will not hesitate to take appropriate action, he says

Analysts said that the implementation of the norms will negatively impact the income of these lenders while increasing pre-payment of loans and balance transfers

Credit to NBFCs grew by 11.9 per cent Y-o-Y in August 2024, down sharply from 21.3 per cent a year ago. Credit to trade declined to 15.5 per cent from 17.4 per cent in August 2023

The latest round of funding comes eight months after the company raised $37 million in a Series F round

With more NBFCs tapping the bond market, interest rates are currently attractive

NaBFID is a development finance institution that was set up in 2021 to focus on infrastructure funding

Tight liquidity, signs of stress weighs on business

India's consumption loan portfolio grew by 15.2 per cent year-on-year (YoY) to Rs 90.3 lakh crore as of March 2024, according to the latest credit bureau report. The fourth edition of CRIF High Mark report noted a slowdown from the 17.4 per cent growth recorded in March 2023, largely due to a deceleration in the home loans segment, which accounts for 40.1 per cent of the overall consumption loan portfolio by value. The home loans portfolio saw growth slowing down to 7.9 per cent YoY in FY24, from the 23 per cent expansion seen in FY23. This was mainly due to muted growth in "originations", which increased by 9.2 per cent in FY'24 compared to 18.2 per cent in the previous fiscal year. Origination refers to the process by which a lender creates or initiates a new loan or credit, including evaluating, processing, and approving a borrower's application. The report finds a shift toward higher ticket sizes, with a growing preference for loans above Rs 35 lakh, although the average ticket