The NBFC sector has experienced some hurdles due to rising interest rates on account of the geo-political climate and recently with RBI regulations on risk weights
FinTech BizNews Service
Mumbai, December 28, 2023: Gautam Jain, Chief Business Officer, Vivriti Capital, has optimistic views as part of the outlook for the NBFC sector as a whole for 2024. Gautam Jain explains: “The NBFC sector has experienced some hurdles due to rising interest rates on account of the geo-political climate and recently with RBI regulations on risk weights. Despite these challenges, we remain optimistic about the sector's long-term growth potential, driven by the persistent demand for credit from mid-market corporate businesses. While the ongoing funding winter may have hindered capital-raising efforts, we believe that capital is available for proven business models generating positive cash flows and anticipate that credit demand in the sector will continue to grow as inflation subsides (already hovering around the tolerance band) and interest rates stabilize in the next 6 to 9-month cycle. The increased risk weight for NBFC loans under the new RBI regulations will raise borrowing costs for NBFCs, however, the impact could be short-term in nature as NBFCs will be able to adjust their lending rates accordingly. Overall, we are confident in the NBFC sector's ability to overcome these temporary challenges and achieve long-term growth.”
