Higher provisioning hits NBFCs in Q3

Performance Metrics Data

- ANUPREKSHA JAIN

NON-BANKING FINANCIAL COMPANIES (NBFCs) witnessed a subdued growth in net profits in the December quarter due to higher provisioning. Moreover, the sector saw a moderation in the loan and disbursement growth due to the slowdown in unsecured lending, according to research reports. The loan growth across all layers of NBFCs was at around 12-14% for Q3 on a year-on-year basis.

Meanwhile, net interest margins were largely stable, despite liquidity tightening. Looking ahead, easing in the liquidity conditions and rate cut are expected to help credit growth.

According to RBI data, while the sector's loan growth has slowed down to 6.5%, the credit growth slumped to 16% versus 22.1% a year ago.