ICRA revises growth outlook for NBFCs

New Delhi: ICRA has revised upward the growth outlook for the current financial year for the retail loans of Non-Bank Financial Companies (NBFC-Retail) and Housing Finance Companies (HFC-Retail), which account for the bulk of the overall sector.

The NBFC-Retail asset under management (AUM), estimated at around Rs 14 lakh crore as of March 2023, is expected to grow at a higher pace of 18-20 per cent in FY24 vis-à-vis the previously estimated level of 12-14 per cent, as growth in the unsecured loans segment, consisting of personal & consumption loans, unsecured small enterprise loans and microfinance loans, would remain strong, the rating agency said in a report. At the same time the HFC-Retail AUM, it said, estimated at around Rs 7 lakh crore as of March 2023, consisting of home loans (HL) and loan against property (LAP), is expected to grow at a relatively moderate 12-14 per cent (albeit higher than the previous estimate of 11-13 per cent) during the same period on the back of rising competition from banks. With a growth expectation of 10-12 per cent in the infrastructure and other wholesale loans of NBFCs and HFCs, the total sector AUM, consisting of retail and other wholesale loans (including infrastructure loans), that stood at about Rs 40 lakh crore as of March 2023.