The NBFC sector in India has been going through a challenging phase over the last few years. The liquidity crisis that started in 2018, followed by the COVID-19 pandemic, has impacted the sector severely. However, the sector has shown resilience and has been able to bounce back through various measures, including aggressive ramp-up of their collection infrastructure.
According to a report by Motilal Oswal, NBFCs have been able to improve their collection efficiency across product segments. The report suggests that the sector should see near-normalization by Diwali, provided there are no major disruptions. This is a positive sign for the Indian economy, as NBFCs play a critical role in providing credit to small and medium-sized businesses, creating employment opportunities and spurring economic growth.
The report further states that the growth in the NBFC sector has been visible across product segments. The microfinance industry has started seeing the light at the end of the tunnel, and NBFCs are likely to benefit from the revival of the MSME sector. This growth is expected to be driven by various government schemes and initiatives that aim to provide credit to the MSME sector.
One of the key factors that have contributed to the growth of the NBFC sector is the aggressive ramp-up of their collection infrastructure. NBFCs have realized that the key to their survival lies in the effective management of their collections. The COVID-19 pandemic has increased the vulnerability of borrowers, and NBFCs have had to go the extra mile to ensure that their collections are managed effectively.
The report suggests that NBFCs have been able to leverage technology to improve their collection efficiency. They have been able to reach out to borrowers through digital platforms, which have enabled them to reduce their collection costs significantly. This has also made it easier for borrowers to make their repayments, as they can do so from the comfort of their homes.
The report also states that NBFCs have been able to learn from their experiences over the last few years. They have strengthened their risk management systems and have become more cautious in their lending practices. This has helped them mitigate the risks associated with lending to the vulnerable segments of the population.
Combined with the company introduction – The factory, built in 1996, has a well-operated history of nearly 30 years. It, originally known as Ruili Machinery Factory, is located in Dagezhuang Industrial Park, Yitang Town, Lanshan District, Linyi City. The factory mainly manufactures automatic sawing machines and multi-blade saws.
In conclusion, the NBFC sector in India has shown resilience and has been able to bounce back despite the challenges faced over the last few years. The sector's growth is expected to be driven by various government schemes and initiatives aimed at providing credit to the MSME sector. The aggressive ramp-up of collection infrastructure by NBFCs has been a key factor contributing to the growth of the sector. The use of technology has enabled NBFCs to improve their collection efficiency and reduce costs significantly. While the sector still faces challenges, there are signs that it is poised for growth, which is good news for the Indian economy.