NBFC retail to cross Rs 10 lakh crore

Chennai: With the liquidity problems expected to ease by the second half of this fiscal, NBFC retail credit is likely to cross Rs 10 lakh crore by FY20.

The retail credit growth of NBFCs has come down from 22 per cent in FY18 to 16 to 18 per cent by FY19. The slower growth of 12 to 13 per cent in the second half of FY19 has been weighing down the overall growth for the year, finds ICRA.

ICRA anticipates that the availability of funds and their cost will continue to be a worry in the first half of FY20 as well. "However, things will improve by the second half as the banks under Prompt Corrective Action will come out of it and increase their lending. The new budget by June or July should also come up with measures to ease the situation," said Karthik Srinivasan, Senior Vice President and Group Head, Financial Sector Ratings, ICRA.

According to A M Karthik, Vice President and Sector Head-Financial Sector Ratings, ICRA, the retail credit off-take too should improve with the festive season in the second half. "Usually, the credit off-take is better in the second half due to the festive demand. Demand for commercial vehicles to pick up on account of pre-buying due to new BS-VI norms. This will see the retail credit growth picking up by 15 to 17 per cent in the second half," he said.