As the Union Budget 2025 approaches, the NBFC sector looks forward to policy measures that will bolster its pivotal role in India's economic growth. NBFCs play a crucial role in extending credit to underserved segments such as MSMEs, Housing, Agriculture, and Renewable Energy, contributing significantly to inclusive development. Establishment of a dedicated liquidity facility through the Finance Industry Development Council (FIDC), aimed at ensuring affordable credit flow to priority sectors would be beneficial. This initiative would support small and mid-sized NBFCs by providing competitive-rate funds, reducing dependency on high-cost borrowing. Empowered with steady capital, NBFCs can effectively meet the credit needs of sectors crucial for job creation, rural development, and sustainable economic growth.
Anticipated reforms like reducing the SARFAESI Act's loan threshold to ₹1 lakh, could expedite asset resolution and bolster financial resilience. Additionally, a proposed market-making mechanism could streamline funding access, enhancing the ability to serve priority sectors effectively. Such reforms if implemented, would further help NBFCs to contribute significantly to India's economic aspirations, ensuring inclusive and sustainable progress.
Rajesh Sharma, MD Capri Global Capital Ltd.