As NBFCs face a credit crunch, real estate sector is pushed to the brink

Experts say the crunch was triggered by the IL&FS issue and not because realtors defaulted

Property developers could default on their repayments following the liuidity squeeze faced by non banking finance companies (NBFC), who have been major lenders of real estate in the absence of bank lending. 

Alongwith housing finance companies, NBFCs accounted for 61 per cent of overall commercial real estate borrowings as of March 2018, said a recent report by CLSA. The real estate loans given by top NBFCs have grown between 24-70 per cent between FY16-FY18, it said. 

Many developers were borrowing from one NBFC to