Non-Banking Financial Companies (NBFCs) registered an overall credit expansion of 14.9% year-on-year at the end of July, accelerating significantly from the 10.6% growth recorded during the same period last year, according to Reserve Bank of India (RBI) data.
Key Drivers of NBFC Credit Expansion
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Surging Gold Loans: NBFC credit against gold jewellery witnessed an exceptional surge, jumping 68.5% year-on-year to reach ₹3.54 lakh crore. This outpaced last year’s growth rate of 43.9%, though commercial banks grew even faster at 88% (reaching ₹5.52 lakh crore).
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Boom in Consumer Durables: Consumer durable financing expanded by 51.5% to ₹74,644 crore, a sharp acceleration from the 18.8% growth recorded a year ago.
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Robust Retail Credit Pie: Driven primarily by gold and consumer financing, total retail loans within NBFC portfolios increased by 21.4% year-on-year (up from 13.7% previously).
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Housing and Vehicle Financing: Housing loans (including specialized housing finance companies) grew 11.9% to ₹8.55 lakh crore, while vehicle loans expanded 15.1% to reach ₹6.29 lakh crore.
Sectoral Trends and Comparison with Banks
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Agriculture and Industry: Credit extended to agriculture and allied activities experienced a strong turnaround, growing 18% compared to just 5.4% a year ago. Conversely, credit to industry slowed down to 7.4% from 9.3%, weighed down by subdued momentum in the infrastructure sector.
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Services Sector Moderation: Services sector credit growth decelerated to 15.2% down from 24.5% last year, reflecting mixed trends where commercial real estate saw buoyant expansion while trade and transport segments cooled.
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Overall Scale: Despite lower bases, NBFC credit growth (totaling ₹60 lakh crore) trailed commercial banks, which registered a broader 19.3% year-on-year credit expansion to ₹221 lakh crore.
