Summary:

According to recent research by Mavenark Advisors, NBFCs are growing at a faster rate than the broader Indian economy. From FY19 to FY24, credit expanded at a 12% CAGR, while assets under management (AUM) surged from under ₹2 lakh crore in 2000 to ₹43 lakh crore by FY24. With 48% of NBFC credit now in retail lending (compared to 34% for banks), this trend is expected to continue, driven by economic recovery and rising consumer demand. NBFCs play a vital role in promoting financial inclusion in India by reaching unbanked and underbanked populations in rural and semi-urban areas. They cater to individuals without formal credit histories, such as workers in the informal sector. By focusing on low-income and higher-risk borrowers, NBFCs strengthen the financial ecosystem. The research indicates that their rapid growth will likely persist, helping bridge financial access gaps and supporting the government's national inclusion objectives.

Source: IBEF

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