With financial penetration increasing at an alarming rate in recent years, borrowers now have access to a plethora of lending platforms through which they can meet their borrowing demands. Aside from banks, they can borrow from a variety of financial organizations, including fintech platforms and Non-Banking Financial Companies (NBFCs).
And, like banks, the size of loans made to retail borrowers via alternative platforms is rapidly increasing. This is supported by the most recent RBI statistics, which was provided in a report.
According to the research, NBFCs of all stripes disbursed the majority of their retail loans totaling 4.33 lakh crore for autos as of September 30, 2023.
According to the latest RBI data in its Report on the Trend and Progress of Banking in India 2022-23, this was followed by 'other retail loans' totaling 3.23 lakh crore. The banking regulator's report presents the performance of the banking system, including cooperative banks and non-banking financial institutions, thus far in 2022-23 and 2023-24.
Loans for Education and Other Purposes
Furthermore, according to RBI data, education loans disbursed by NBFCs totaled 36,000 crore as of September 30, 2023. NBFCs provided housing loans worth 39,220 crore and consumer durable loans worth 38,480 crore. Individual advances against gold totaled 1.40 lakh crore, followed by micro finance loans totaling 1.16 lakh crore.
Meanwhile, non-banking financial organizations' (NBFCs') consolidated balance sheets rose by 14.8% in 2022-23, driven by double-digit lending growth.
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Profitability and asset quality in the sector increased in 2022-23 and in the first half of 2023-24. The largest percentage growth in NBFC loans was recorded in education loans, which reported a 79 percent increase in 2023 over 2022.
In 2022, the size of education loans provided by NBFCs was 14,162 crore, which climbed to 25,352 crore in 2023, representing a 79 percent rise in one year. Microfinance loans increased by 45 percent, while other retail loans increased by 40 percent.
