NBFCs are an essential source of financing and will play a key role in taking the Indian Economy to $5 trillion. NBFCs have mastered the art of banking the unbanked segment of the society in both urban and rural areas. A deep-rooted understanding of the customer, the local geography, and prevailing market dynamics across various regions, coupled with the flexibility in operations based on the borrower’s needs, have been the key elements of their success. Policy-makers have been taking steps to alleviate the problems in the NBFC sector. The session will throw light on the role of NBFCs in India’s $5 trillion economy target, the expected policy changes which can impact the part of small industries and NBFCs, and all you want to know about NBFCs.

Key Takeaways:

• The Indian economy has almost reached a GDP of $3.1 trillion, and we are ranked 5th globally.
•  There are 12 types of NBFCs according to RBI’s classification. More than 9500 NBFCs are operating in India as of January 2022, and their total asset value is estimated to be INR 25 lakh crore rupees.
• Regulatory practices will play a vital role in the future of NBFCs. The cost of compliance will increase significantly for all NBFCs soon.
• The partnership between mid-sized NBFCs and fintechs creates opportunities for fintechs to design alternate scoring models and reach new geographies and new customer segments.
• NBFCs have the capital, whereas fintechs, on the other hand, have niche products and alternative scoring models and can deliver credit efficiently. So, the partnerships/ collaborations between them are successful for both.