NBFCs are key to reaching underserved segments

Most small borrowers don't have other standard KYC documents and hence Aadhaar authentication becomes critical

Non-banking financial companies (NBFCs) are a significant contributor to credit growth, having captured over 20 per cent of the credit pie. Given their reach in the underserved and underbanked sectors, they play a pivotal role in achieving the objective of financial inclusion. Both the government and regulators have recognised their importance, and have been coming up with a number of measures to support credit flow.
 
The recently amended regulation under the co-lending model in the priority sector is one such measure which would help in achieving greater financial inclusion, with the twin benefits of lower cost and better reach