Key messages

• Covid-19 has exposed non-banking financial companies (NBFCs) to twin challenges of asset quality and funding access
  
  • Some green shoots visible now; should restore confidence if these sustain over the next few quarters
    
• NBFC asset growth seen turning positive next fiscal, but will be muted at 5-6%
  
  • Uncertainty on asset quality remains; hence, funding challenges will continue in the near term
    
  • Gold loans glitter, while growth of all other segments expected to be lower than that seen in the past
    
• NBFCs to lose 1% share in fiscal 2022 after strong growth over much of the past decade
  
  • Competition from banks intensifying with them gaining share in assets under management (AUM) in housing and vehicle loans
    
• Confidence capital or strong parentage will be key support factors for NBFCs