NBFCs likely to maintain AUM growth despite cautious arising from high customer leverage: Crisil
Crisil Ratings in its latest report has said that non-bank finance companies (NBFCs) are likely to maintain growth in assets under management (AUM) at 18 per cent, despite a cautious approach on lending in certain buckets due to high customer leverage. It said the overall AUMs for the industry are expected to touch Rs 50 lakh crore by FY27-end on the back of a steady 18-19 per cent growth per annum.
The agency said unsecured MSME business loans, which constitute 6 per cent of industry AUM, have seen an increase in delinquencies amid higher borrower leverage and adjacencies with the microfinance customer segment. It noted that this will result in the AUM growth slowing down to 13-14 per cent from over 31 per cent seen in the last two fiscals. It said in the case of personal loans, which constitute 11 per cent of the industry AUM, the growth is expected to improve to 22-25 per cent from 18 per cent, but will still be lower than the 37 per cent seen in FY24.
The report said recent policy measures, such as rationalisation and reduction of goods and services tax (GST) rates, together with benign inflation, will help sustain retail credit demand across asset classes. It said the growth in loan against property (LAP)/secured MSME segment, constituting 15 per cent of NBFC AUM, is expected to normalise to 26-27 per cent in FY26 and FY27, but lenders will be cautious on the low-ticket segment due to an increase in early delinquencies. It added that the gold loan segment, which is 6 per cent of AUM, should continue to outperform other asset classes, driven by increased formalisation, with a shift from unorganised players, high gold prices, and NBFCs' interest in entering the gold finance market.
