Assets under management (AUM) of non-banking financial companies (NBFCs) is expected to grow at 14-17% in the next fiscal on the back of continued strong credit demand across retail loan segments, CRISIL Ratings said in a report.
Growth may be moderately lower than 16-18% expected in the current fiscal as unsecured retail loans, the fastest growing segment in the NBFC AUM pie so far, are likely to see a relatively slower growth as NBFCs recalibrate their strategies due to the recent regulatory measures issued by the Reserve Bank of India (RBI), the rating agency said.
“Going forward, diversification in product offerings and funding profile will be key constituents of their growth strategy,” CRISIL said.
“The recent regulatory measures are targeted at unsecured retail loans and do not impact the secured asset classes where growth is expected to be steady,” Gurpreet Chhatwal, Managing Director, CRISIL Ratings said. “Importantly, the regulatory changes do not impact Housing Finance Companies,” he added.
“The two largest traditional segments of home loans and vehicle finance now comprise 25-27% each of the NBFC AUM. Both segments are expected to report steady growth,” he said.
Mr. Chhatwal said in the home loan segment, a growth of 12-14% next fiscal would be driven by HFCs’ focus on affordable home loans (ticket sizes of less than ₹25 lakh), while vehicle finance would grow at 18-19% this fiscal and sustain 17-18% growth next fiscal on the back of solid underlying-asset sales.
“Unsecured loans is now the third largest segment in the NBFC AUM pie. And this segment is likely to see a moderation in growth due to the regulatory measures which affect NBFC AUM growth on both their asset and liability sides on three fronts,” he further said.
