Moody’s Ratings project a growth of about 15% in loans at NBFCs over the next 12 to 18 months
Moody’s Ratings pegged the growth of the Indian economy at 6.6 percent in the current fiscal year.
According to Moody’s strong credit demand, coupled with robust economic growth will support the non-bank finance companies (NBFCs) sector’s profitability.
“We expect India’s economy to expand 6.6 percent in the year ended March 2025 (FY25) and 6.2 percent the following year, and this will lead to robust loan growth at NBFCs, mitigating the impact of rising funding costs on their profitability,” Moody’s Ratings said.
The Indian economy is expected to have grown 8 percent in the 2023-24 fiscal year.
Moody’s Ratings has projected a growth of about 15 percent in loans at NBFCs over the next 12 to 18 months. This growth is expected to be driven by various types of lending, including infrastructure financing by large government-owned NBFCs and loans to small and medium-sized enterprises.
“Funding costs for non-bank finance companies (NBFCs) in India are rising, but strong credit demand fuelled by the country’s robust economic growth will support the sector’s profitability.
Also, robust economic conditions will help them preserve their asset quality even as rises in interest rates increase the debt burdens of their customers,” Moody’s said.
Moody’s FY25 GDP growth predictions are lower than the Reserve Bank of India’s (RBI’s), as well as other agencies, but is at par with Deloitte’s forecast.
The RBI had projected a growth of 7 percent in the current fiscal for the Indian economy. Asian Development Bank (ADB) and Fitch Ratings have estimated growth at 7 percent each, while S&P Global Ratings and Morgan Stanley expect the growth rate to be at 6.8 percent.
However, Deloitte India estimates the country’s GDP to grow at 6.6 percent in the current fiscal, driven by consumption expenditure, exports rebound, and capital flows. However, it also flagged concerns about inflation and geopolitical uncertainties.
NBFCs are anticipated to continue their significant role in meeting the credit requirements of individuals and businesses in India’s extensive economy.
“Growth in unsecured retail loans will slow after the RBI raised the risk weight of such credit assets for both banks and NBFCs by 25 percentage points in December 2023,” Moody’s Ratings said.
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India does not need any certificates from these credit agencies……. it happens , it happens whatever the % is …nothing to worry. Time to ignore these credit agencies………& decouple financial loans by corporates or govt from these credit agencies who are another Woke characters
Pakistan is No.1 in economy
Afghanistan is No. 2
China is on Moon (no comparison)