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NBFCs’ collection efficiency takes a hit post demonetisation

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Non-banking finance companies (NBFCs) represent an important linkage between the formal banking sector and informal segments of the real economy in India (wage labourers, smallholder farmers, unorganised retail, and domestic workers) through the channelling of credit from the former to the latter.

They have a significant presence in the microfinance, small business finance and commercial vehicles finance segments. Of the 11,682 NBFCs registered with the Reserve Bank of India as of end-March 2016, 209 were systemically important non-deposittaking NBFCs which are subject to more stringent prudential norms and provisioning requirements. Loans & advances by these entities alone accounted for around Rs 10.7 lakh crore. Through the data lens of collection efficiencies and disbursement volumes of over 100 NBFCs, we take stock of the impact of demonetisation on them. This also provides insights on the ultimate impact on the informal economy in India.

For more on this story visit the following link: NBFCs’ collection efficiency takes a hit post demonetisation

Source: The Economic Times

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