Indian finance professionals in a busy office discussing strategies amidst currency and documents.
Non-banking finance companies (NBFCs) in India are projected to increase their reliance on bank borrowings in fiscal year 2027, driven by lower domestic interest rates and increasing geopolitical instability. This shift is expected as external commercial borrowings become less attractive due to the uncertain global landscape, according to industry analysis.
The increased borrowing from banks will provide NBFCs with a stable and potentially cheaper source of funds compared to international markets. This strategy is particularly relevant as geopolitical risks make overseas funding more volatile and expensive.
In addition to bank borrowings, NBFCs may also turn to securitization as a means to mitigate funding challenges. Securitization involves pooling assets and creating new securities backed by those assets, which can then be sold to investors. This approach allows NBFCs to diversify their funding sources and manage liquidity.
The move towards increased bank borrowing and securitization reflects a broader trend among NBFCs to secure stable funding channels in a dynamic economic environment. These strategies are aimed at ensuring business continuity and supporting growth amid potential market fluctuations.
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