Mumbai (Maharashtra) [India], September 3 (ANI): Non-banking financial companies (NBFCs) can lead the charge on financial inclusion and last-mile credit access by using India's digital public infrastructure to reach underserved borrowers, Reserve Bank of India Deputy Governor Shirish Chandra Murmu said on Thursday.
Addressing the 7th CII NBFC and HFC Summit, Murmu said NBFCs and housing finance companies (HFCs) have moved beyond their role as alternative lenders and have become specialised financial institutions that complement banks by serving remote areas, underserved segments and niche markets.
“The role of NBFCs is changing again, from alternative lenders to specialized financial partners. Their diversity is their biggest strength. In this new phase of growth, NBFCs can lead in three areas,” Murmu said.
He identified financial inclusion and last-mile reach as the first area where NBFCs can play a leading role, supported by digital public infrastructure such as UPI, Aadhaar, the Account Aggregator framework and the Unified Lending Interface (ULI).
Murmu said these platforms can help lower the cost of credit and speed up loan disbursals, while consent-based data sharing can help lenders make better lending decisions.
“This reduces reliance on physical collateral and extends formal credit to MSMEs and microfinance borrowers,” he said.
The RBI Deputy Governor said substantial credit needs of micro, small and medium enterprises (MSMEs) remain unmet by formal lenders, highlighting the scale of opportunity for NBFCs.
He said NBFCs and HFCs can also use their sector-specific expertise in areas such as supply chain finance, infrastructure debt, affordable housing and vehicle financing to structure loans around borrowers' cash flows.
“Our economy needs lenders who understand specific industries and can structure credit around their borrowers' cash flows,” Murmu said, adding that co-lending arrangements with banks can further extend the impact.
NBFC credit currently stands at about 16.7 per cent of nominal GDP, up from 15.9 per cent a year earlier. It accounts for about 27 per cent of credit extended by scheduled commercial banks, compared with 26 per cent a year ago, he said.
Murmu also highlighted the role of technology in expanding access to credit, noting that NBFCs have adopted paperless onboarding, algorithmic credit scoring and cash-flow-based lending.
At the same time, he stressed that the sector's growth must be supported by strong governance, liquidity management and responsible lending. “Strong liquidity risk management is not optional,” he said, while also calling for diversified funding sources and a deeper corporate bond market. (ANI)
NBFCs can lead charge on financial inclusion, says RBI Deputy Governor Murmu
