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India Ratings and Research (Ind-Ra) which has maintained a neutral sector outlook and a Stable rating Outlook for non-bank finance companies (NBFCs) for FY26 has projected that the loan growth of NBFCs would further decline in FY26 to 18.5% YoY (FY25: Ind-Ra’s estimated down 20% YoY).
There would be more pronounced decline in the unsecured lending segment which includes personal, business and microfinance loans, the rating agency said.
According to the rating agency the NBFCs after witnessing a phase of high reliance on the unsecured loan segment for achieving loan growth and to protect profitability, along with increased regulatory oversight, they are calibrating their business expansion plans to optimise the risk-adjusted profitability over the medium term.
“Ind-Ra has maintained a neutral sector outlook for NBFCs and Stable rating outlook for FY26. For vehicles, the outlook for Loan Against Property (LAP) and gold loans sector outlook remains unchanged at neutral, however it has been revised to deteriorating for unsecured business and personal loans,” Karan Gupta, Head and Director Financial Institutions, Ind-Ra.
“At an overall level, NBFCs are likely to see a slowdown in loan growth and pressure on credit costs and margins in FY26. Liability raising for the sector along with delinquency movement in the unsecured asset segment remains a key monitorable,” he said.
Published – January 07, 2025 10:04 pm IST
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NBFC loan growth to decline in FY26 to 18.5% YoY: Ind-Ra
