Fitch Ratings Warns of Challenges Ahead for Non-Bank Financial Institutions in India

After reaching a peak of 18% in loan growth in the financial year ending March 2024 (FY24), sector growth is showing signs of moderation. Credit growth for NBFIs, excluding housing finance companies, has slowed to 6.6% between March and September 2024. This deceleration is partly attributed to the country’s softer economic conditions, resulting in Fitch’s downward revision of its FY25 GDP growth forecast to 6.4% from a previous 7.0%. However, the agency does not anticipate a prolonged economic downturn, maintaining its FY26 GDP growth estimate at 6.5%.