The assets under management (AUM) of non-banking financial companies (NBFCs) would grow at 18-19% this fiscal and the next, driven by whetted consumption demand, and cross the ₹50 lakh crore mark by March 2027, according to Crisil Ratings.
“Recent policy measures, such as rationalisation and reduction of goods and services tax (GST) rates, together with benign inflation, will help sustain retail credit demand across asset classes. However, risk calibration and funding access dynamics will impact growth outlooks differently across entities and asset segments,” it said.
Krishnan Sitaraman, Chief Ratings Officer, Crisil Ratings said, “Vehicle finance and home loans will see steady growth amid intensifying competition. However, exercising due caution on heightened customer leverage, NBFCs will adopt risk-calibrated growth especially in the micro, medium and small enterprises (MSME) and unsecured loan segments.”
Vehicle finance (22% of NBFC AUM) growth would remain steady at 16-17% over this fiscal and the next. The GST cuts have given a fillip to unit sales across vehicle categories, particularly cars, and this momentum is likely to continue.
Additionally, increasing preference for premium vehicles among buyers and focus on used-vehicle financing will support AUM growth in the segment even though competition with banks remains strong in new vehicles, Crisil said.
In home loans (22% of NBFC AUM), growth is estimated at 12-13% over the two fiscals, down from 14% last fiscal. While the long-term demand for end-user housing remains strong, growth will be marginally slower due to intense competition, especially from public sector banks, in the prime home loan market.
Further, expected moderation in residential real estate sales growth (in value terms) in the top seven cities could affect disbursement of new home loans, it said.
In unsecured loans, growth trends would vary based on sub-segments—personal loans and business loans.
“From a high of 37% in fiscal 2024, growth in personal loans (11% of NBFC AUM) fell sharply to 18% last fiscal as players undertook strategic recalibration of target customer segments on the back of regulatory measures. With improved performance of newer originations, growth of personal loans will improve to 22-25% over this fiscal and the next,” the rating agency said.
“However, unsecured MSME business loans (6% of NBFC AUM) have seen an increase in delinquencies amidst higher borrower leverage and adjacencies with the microfinance customer segment. Therefore, growth here is expected to slow to 13-14% from the highs of 31% seen in the previous two fiscals,” it said.
Growth in loan against property (LAP)/secured MSME segment (15% of NBFC AUM), is expected to normalise but remain robust at 26-27% over this fiscal and the next. However, lenders are expected to adopt a cautious stance in the smaller-ticket loan segment due to increase in early delinquencies, it said.
The gold loan segment (6% of AUM) should continue to outperform other asset classes, driven by increased formalisation, with a shift from unorganised players, high gold prices, and NBFCs’ interest in entering the gold finance market.
From a liabilities’ perspective, access to bank funding remains an important determinant for growth for NBFCs, especially for mid-sized players as compared with larger entities, Crisil said.
Ajit Velonie, Senior Director, Crisil Ratings said, “Despite the rollback in risk weights from April 2025, bank lending to NBFCs is yet to see a pick-up and stood at ₹13.8 lakh crore as of September 2025, just marginally above the levels seen a year back. While larger NBFCs have accessed other funding avenues such as the debt capital market and external commercial borrowings, others have fewer alternatives. Hence, the extent of rebound in bank funding will influence the growth outlook for these NBFCs.”
Published – November 24, 2025 11:34 pm IST
