Retail credit of non-banking finance companies (NBFCs) is likely to grow at 19-22 per cent in the next fiscal, led by improvement in commercial vehicle segment and gold loan growth, rating agency Icra said today.
For the first nine months of the current fiscal, NBFCs' retail credit stood at Rs 4.7 trillion, registering a growth of 18.8 per cent.
"Growth is likely to be led by an improvement in the CV (commercial vehicle) segment and gold loan growth. The growth in microfinance, unsecured loans and loan against property (LAP) are likely to remain high at over 30 per cent," the domestic rating agency said in a report here.
The retail credit had grown at 14.5 per cent in FY15 and 9.5 per cent in FY14.
However, segments which could see muted growth include the tractor space as lenders remain cautious in light of the weak rainfall over the past three crop cycles, it said.
Further, credit offtake in the CE (commercial equipment) segment is also expected to pick up only gradually in FY17 when the steps initiated by the government to boost infrastructure take fruition, the rating outfit said.
The report said overall 90 days-plus delinquencies continue to remain high at 5.5 per cent as against gross NPA of 4.4 per cent as on December 31, 2015. "Some moderation is likely to be seen in FY17," it added.
According to the report, high growth in unsecured loans and aggressive lending norms in LAP segment remain a credit concern.
Icra estimates NBFCs will need to mobilise around Rs 2.2-2.4 trillion funding in FY17, of which bond mobilisation could be to the extent of Rs 600-700 billion.
The agency had upgraded 24 NBFCs in 11 months of FY16 as against 31 in FY15 and had nil downgrades in 11 months of the current fiscal year.
