The winds of change are blowing through India’s lending landscape. Remember how nonbanking financial companies (NBFCs) were growing at full speed? Well, 2025 might tell a different story. Let’s break this down in simple terms.
Why are experts saying 2025 will be slower?
According to AM Karthik from ICRA Limited, NBFCs might grow at just 13-15% in FY2025, down from their earlier 18% pace. This isn’t random—it’s happening because these companies went a bit too fast with personal loans in recent years, and now they’re catching their breath.
Think about it—haven’t you noticed all those instant personal loan ads everywhere? That’s exactly what worried the Reserve Bank of India (RBI). They saw too many people taking unsecured loans, and in late 2023, they decided to put some speed bumps in place. The result? The whole industry had to slow down in 2024.
But here’s where it gets tricky for these companies—banks aren’t as eager to lend them money anymore. The numbers tell the story: bank lending to NBFCs actually shrank by 1.2% until July. Smaller NBFCs are feeling the squeeze—they either have to slow down their lending or borrow money at higher rates. Neither option is great for business.
What does this mean for borrowers?
If you’re planning to take a loan from an NBFC, you might notice two things: either it’ll be harder to get one, or you might have to pay more interest. The days of easy, quick loans might be taking a pause.
Is slower growth always bad?
Not really. Think of it like driving—sometimes it’s better to go at a steady pace than race ahead and risk a crash. While investors might not love slower growth, it’s probably healthier for these companies in the long run.
Want to learn more about managing your money wisely?
Try these simple steps: read trusted financial news websites like Moneycontrol or Economic Times, follow finance experts on LinkedIn who share practical tips, and maybe even try some free online finance courses from reputable institutions. Just remember—when it comes to money, slow and steady often wins the race.
Conclusion
While the slowdown in NBFC growth in 2025 might seem concerning at first glance, it offers an opportunity for the sector to stabilise and adopt more sustainable practices. This period of recalibration could lead to stronger, more resilient financial institutions in the long run. Borrowers and investors alike should see this as a moment to recalibrate their strategies, ensuring a healthier financial ecosystem for the future.
The key takeaway? 2025 might be the year when NBFCs focus on steady growth rather than speed. And maybe that’s not such a bad thing after all.
