NBFCS – How They are Changing the Business Loan Landscape in India ?
Non banking Financing services have played a significant role in shaping the loan market palace of India. It has covered all the aspects like health loans, farm loans, mortgages and business loans. Their innovative schemes and tenure of loans has pulled a significant share of the loan market. NBFCs in the past years gave importance to the unique profile of each customer and opportunities to the unbanked sector to avail loans at low interest rates and hence are ideal to provide credit to the MSME sector. NBFC have now become an important part of the financial system.
NFBCs have much less complications than a bank to avail different types of loans. These agencies have altered the norms of the loan market and have brought a massive change in the finance sector. The most distinct feature of NBFcs is the immediate disbursal of funds. The moderate norms of the NBFC sector have brought efficiency in the financial intermediation.
With innovative schemes and low cost structures NBFCs have successfully gone deep into the roots of developing India. In doing that they already crossed many milestones regarding student loan, business loans and farms loans. NBFCs now lend its hand in the healthcare sector and automobile industry. Finance is the source of innovation as dreams become reality by investing money.
What Makes NBFCs Prosperous!
Technological Advancement - NBFC are known for swift transactions and immediate payment systems. NBFCs use comprehensive credit tools to accurately calculate and analyse to meet the needs of the customers. NBFCs technology aims to reduce the dependency of manual tasks which actually cuts down the cost of field operations.
Low Interest Rates - While availing a loan the first thing that comes to the mind is interest rate at which will be sanctioned. NBFCs are know for providing much less interest as compared to other banks
Less Documentation - an individual does not require to fill lengthy forms and indulge into hectic paperwork. This makes the process of loan much easy and simpler. This saves a lot of time and the manager can focus on improving other strategies.
Immediate Disbursal of funds - NBFCs were established with the motive to meet up the financial problem of the unrecognized or unserved sector. As these sectors are in need of immediate funds to raise their business activities or standards. The quick process and the easy documentation lets you get loans within a very short period of time.
A Pre Approved Loan Limit - Most of the NBFC agency provide you loan limit to meet up the sudden expenses of the business. Business is all about risk and risk is unseen. A business owner can withdraw the fund to keep its business activities functional. This provides an extra cushion to the individuals who owns a small scale business.
Reaching To The Roots - Till now NBFC have completely understood the mechanism of the India system. With maximum efforts they have been able to reach the Rural and urban sector and have provide them the needed financial aid.
NBFCs act as the shadow of the banks and are regulated by the Reserve bank of India. The Reserve Bank regulates and supervises three categories of NBFIs, viz. All-India financial institutions (AIFIs), primary dealers (PDs) and NBFCs. Beside being highly technical NBFCs do not solely depend on the traditional methods of providing loans to the customer. NBFCs do not give much importance to the past credit score of the customer rather they study the profile and the need of different customers. NBFC do not possess much risk to the depository as it does not depend on public funds either directly or indirectly.
Technology is playing a vital role in upbring the role of NBFCs in India. NBFCS with the upgraded technology has increased the capital transactions sharply. By disbursing funds quickly to India trade and commerce industry NBFCs are enhancing the country's core infrastructure. Despite the slowdown of the economy this sector managed to grow by 22% every and is enhancing the mechanism of the economy. Due to cost cutting policies NBFCs tend to earn more profits than banks. These non banking agencies have innovative products which make availing loans flexible and provide various investment opportunities.
NBFCs also have also raised the standard of living by indirectly providing employment opportunities to workforce, who work under players of the market. The extensive support given by NBFCs to enhance infrastructure is remarkable. Apart from it NBFCs renders long term credit at a feasible rate of interest to uplift the society. NBFCs mobilize funds, resources and create a balance between the distribution of assets and intraregional income. These Agencies are proven to be a potent lender by turning savings into investment practices.
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