50 DALAL STREET INVESTMENT JOURNAL I JULY 10 - 23 , 2017 DSIJ.in^

A

midst all the chaos and

the uncertainty on the

macroeconomic front in

India, and especially in

the banking sector, the

non-banking finance company

(NBFC) sector is one sector that has

managed to deliver consistent growth

year-on-year.

If one considers the current

government’s goal of rapidly improving

financial inclusion in India, one will

immediately realise the importance of

NBFC sector and the crucial role it plays

in complementing the banking sector in

reaching out credit to the un-banked

sections of society.

Indeed, NBFCs form an integral part of

not only Indian financial system, but

also the Indian economy.

The NBFC sector in India has

undergone tremendous transformation

over the past few years and has been

able to deliver consistent year-on-year

growth. NBFCs have played an

important role in infrastructure

development in India and has provided

support for the economically weaker

sections.

NBFCs have especially contributed

handsomely to the growth in advances

in micro, small and medium enterprises

(MSMEs), which has by far been the

biggest achievement of the sector.

NBFCs recently have improved their

performance on several metrics, even as

the banking sector struggled owing to

the issue of non-performing assets.

Based on the financial stability report

(FSR) of the Reserve Bank of India

(RBI), the NBFC loans expanded 16.6

per cent in FY16, reflecting a growth

twice as fast as the 8.8 per cent credit

NBFC sector has grown consistently and has undergone tremendous transformation over

the past few years. Yogesh Supekar and Nikita Singh explain why the sector is on a

growth trajectory and here to stay for good.

Cover Story

To Unleash Its Potential

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