5 Reasons Why NBFC Sector is Important

1. One-fifth credit share in economy: Credit rating agency Fitch estimates that NBFCs now account for 20 per cent of credit to India’s economy, compared with 15 per cent five years ago.
2. Critical lenders for housing and auto: They accounted for 30 per cent of auto loans in 2018, and, along with housing financing companies, for 44 per cent of home loans. The automobile and residential real estate segments have been hit by the crisis in the NBFC sector.
3. Important for jobs: Most vehicle makers have cut down production, and ancillary units have fired many employees owing to the slow demand. The liquidity crisis is the major factor preventing completion of more than 5.6 lakh stalled housing units across top seven cities
4. Key for FMCG Growth: Many fast moving consumer goods makers have seen their growth slowing down over the last few quarters. NBFCs play an important role in driving consumption pattern and fund important sectors that drive Indian economy.
5. Important for $5T target: Any slowdown in lending to these crucial sectors will adversely hamper our country’s plan to become a $5 trillion economy.