5 Factors That Led To The Growth Of NBFCs In India
Non-Banking Financial Companies (NBFCs) have been instrumental in driving the growth of the Indian economy. In recent years, these entities have proliferated dramatically and become the preferred source of credit for several small businesses and individuals. Here are five factors that have led to the growth of NBFCs in India. 1. Regulatory Challenges Faced By Banks Stringent regulatory norms for banks have compelled them to adopt a cautious approach with regard to lending. This has resulted in a credit gap that NBFCs have been able to fill effectively. It has been observed that the credit-deposit ratio of banks has been declining over the years, providing ample opportunities for NBFCs to capture a significant share of the lending market. Also Read: Understanding The Role And Functions Of NBFC In India 2. Favourable Demographics India’s population is the second-largest in the world and is expected to increase at a steady pace. The country’s economy is poised to grow at a robust rate whi...