New Delhi, June 12 (IANS) The total balance sheet of the non-banking financial company (NBFC) sector in India is projected to reach Rs 92.9 trillion by FY28, with nearly 15 per cent annual growth, a report said on Friday.

The report from ratings agency Brickwork Ratings said the total assets in the segment stood at Rs 61.1 trillion in FY25, with growth driven by robust loan demand across retail, micro, small, and medium enterprises (MSME), and services segments.

Credit growth reached 19.4 per cent YoY in FY25, outpacing the scheduled commercial banks’ (SCB) growth of 11.5 per cent, and will likely expand by 16 per cent between FY26 and FY28, signalling deeper financial inclusion alongside heightened household or SME leverage.

“It boosts NBFCs’ systemic role and bank or mutual fund linkages, while amplifying credit cycle risks and liquidity vulnerabilities, prompting demands for stricter prudential norms and disclosures,” the report noted.

“India’s NBFC sector maintains a stable outlook, supported by moderated but resilient credit growth, improving asset quality, and ongoing digital integration. On a more near-term basis, the sector enters FY27 with widening performance gaps as strong headline growth contrasts with rising stress in unsecured and rural credit,” said Hemant Sagare, Director of Ratings, Brickwork Ratings.

Elevated funding costs, geopolitical spill-overs, and tighter regulations are reshaping risk profiles. NBFCs with stronger digital risk systems and regulatory alignment are better positioned to sustain resilience and credit stability through the year, he added.

NBFC asset quality has improved markedly, as gross non‑performing assets (GNPA) dropped from 3.5 per cent in FY24 to 2.9 per cent in FY25 and net NPAs remained steady at around 1 per cent, supported by broad‑based gains and lower slippages.

In the near term, asset quality is expected to remain broadly stable, shaped by household cash flows, MSME earnings, and leverage trends, with slippages contained by capital buffers and prudent provisioning.

Over the longer horizon, NPA trends will depend on disciplined credit expansion, stronger governance, secured lending, and robust monitoring systems, the report forecasted.

—IANS

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