The growth outlook for non-banking financial corporations (NBFCs) and HFCs (housing finance companies) has improved to 13-15 per cent from 1113 per cent earlier led by an upward revision in the projection of retail loan growth, ICRA Ratings said, reported Business Line .
Total sector AUM stood, consisting of retail, infrastructure and wholesale loans, stood at about ₹40 lakh crore at the end of March.
Retail loan portfolios of NBFCs are seen growing 18-20 per cent in FY24 against 1214 per cent earlier, the rating agency said, attributing the revision to strong growth in unsecured loans – comprising personal and consumption loans, unsecured small enterprise loans and microfinance loans. NBFCs’ retail AUM was at ₹14lakh crore as of March 2023.
“High growth in the NBFC retail segment shall be driven by the expected expansion of 26-28 per cent for unsecured loans, which stood at about ₹5.1 lakh crore as of March 2023. Secured NBFCretail AUM, consisting of vehicle finance, gold loans and secured business loans etc, together is expected to grow at a relatively sedate albeit healthy 14-16 per cent,” said AM Karthik, VicePresident and CoGroup Head, Financial Sector Ratings, ICRA.
HFCs’ retail AUM of ₹7 lakh crore as of March 2023, comprising home loans and loans against property, is expected to grow at 12-14 per cent, also higher than the earlier estimate of 1113 per cent.
On the other hand, the growth outlook for infrastructure and other wholesale loans remained unchanged at 10-12 per cent, ICRA said.
In FY23, NBFCs’ retail AUM grew 26 per cent led by 44 per cent increase in unsecured loans.
Unsecured loans have grown at a CAGR of 27 per cent over the last five years whereas secured loans grew at 11 per cent.