HOME > MARKETS > ECONOMY NEWS
  ECONOMY NEWS
ECONOMY
Ind-Ra maintains stable outlook on retail NBFC, housing finance company sectors for FY22
Mar-04-2021

Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a stable outlook on retail non-banking finance company (NBFC) and housing finance company sectors for FY22. The agency noted that the system liquidity has improved considerably, while majority of large non-banks have strengthened their capital buffers and the sector has started witnessing disbursement growth.

However, the agency continues to maintain a negative outlook on the wholesale NBFC sector for FY22, factoring in significant asset quality challenges and added regulatory restrictions on different products lines and increased competition from banks. As per the report, the wide differential among NBFCs’ funding costs is likely to push the sector to consolidate, especially in the sectors with a thin margin profile and limited product differentiation.

Ind-Ra also said that FY21 saw a strong regulatory support through the infusion of liquidity, which aided the liquidity risk converting into a solvency risk. However, NBFCs need to plan for managing liquidity as and when these measures are rolled back. Ind-Ra believes that securitisation and co-lending model would get further traction as the funding requirement of the sector overshoots the saving mobilisation rate.

  RELATED NEWS >>