India's GDP projected to expand by 6.6% in FY25, 6.2% in FY26: Moody's

The Indian economy is estimated to have expanded by 8 per cent in FY24.

Robust economic conditions will help NBFCs preserve their asset quality even as rise in interest rates increase the debt burdens of their customers, Moody's said in a commentary.

Aggregate year-on-year (YoY) loan growth at NBFCs accelerated to 20.8 per cent in September last year from 10.8 per cent a year earlier, driven by demand for retail loans, a news agency reported citing the commentary.

Moody's expects NBFC loans to grow at about 15 per cent in the next 12-18 months, driven by a variety of lending, including infrastructure financing by large government-owned NBFCs and loans to small and medium enterprises.

"Growth in unsecured retail loans will slow after the Reserve Bank of India (RBI) raised the risk weight of such credit assets for both banks and NBFCs by 25 percentage points in December 2023," Moody's Ratings said.

Indian NBFCs will continue to play a key role in meeting credit needs among individuals and businesses. Most of them are owned by the government or by large corporate groups, which would lend stability to their funding in times of stress, Moody’s added.

Fibre2Fashion News Desk (DS)