The share of non-banking financiers in the overall loan market will go up to 19% by the fiscal 2020 from 16% last fiscal year, primarily because of a strong play in the wholesale segment, says a report.
This will be possible on the back of an 18% annual growth in non-banking finance companies (NBFCs) loan books over the next three years, a Crisil report said on Thursday.
The NBFC segment had taken four fiscals for a three percentage points jump in the share in the overall loans, from 13% to 16%, it said.
The agency said NBFCs will be able to increase their share in the overall pie despite increasingly aggressive play by private sector banks in the retail segment, and also a possible toughening of stance from the state-run ones after the recently announced capital infusion. "While NBFCs would continue to do well in their traditional stronghold of retail finance, they are seen growing fastest in the wholesale finance segment, which would provide a kicker to their overall credit growth," it said.
Share of wholesale credit in the NBFC credit pie is also expected to increase to 19 per cent by 2020 from 12% in 2014, it said. The agency said NBFCs, many of them driven by strong parentage, started focusing on the wholesale segment about five years ago. "The opportunity in realty and the structured credit space has gone up materially after the Rera implementation and the rising demand for mid-corporate promoter financing," Crisil president Gurpreet Chhatwal said.
He said in infra financing, highways offer a large opportunity but was quick to add that there is a concentration risk because of large ticket sizes and so prudent underwriting standards and close monitoring are crucial to sustainable growth. The report said home loans will grow at 18% over the next three fiscals on a sharper focus by the housing finance firms on the self-employed borrowers.