Positive impactSector
NBFCs shift towards secured retail credit as microfinance loans decline
Economic Times 1 hr ago·23 Oct 2026, 6:41 pm
The Reserve Bank of India has reported a notable shift in the lending habits of Non-Banking Financial Companies (NBFCs). While the sector continues to expand, the growth is now being driven primarily by secured retail loans, such as those for gold, housing, and vehicles. Conversely, credit extended to microfinance institutions and self-help groups has seen a decline at the end of the reporting period.
This trend highlights a strategic pivot by NBFCs towards lower-risk assets. By focusing on secured lending, these companies aim to bolster their balance sheets and improve stability in a fluctuating economic environment. For investors, this signals a move away from high-risk, unsecured microfinance exposure towards more traditional, asset-backed credit products.
Moving forward, the sector's performance will likely hinge on the demand for consumer durables and housing. Investors should monitor how NBFCs manage this transition and whether the growth in secured lending can sustain overall credit expansion in the coming quarters.
Excerpt from Economic Times
Published On Oct 24, 2026 at 12:11 AM IST Non-banking financial companies are shifting towards secured lending options as credit to microfinance and self-help group (SHG) loans declined at end-December 2025, while gold loans , housing and vehicle loans continued to drive retail credit growth , the Reserve Bank of…Read the original at Economic Times
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- Category: Sector.
- AI reads the tone as positive (potentially bullish) for the stock.
- Assessed as a significant, market-relevant update.
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