NBFCS’ AUTO LOAN BOOK TO RISE 15%

Mumbai, Feb 12: The vehicle finance business of non- banking finance companies ( NBFCs) is likely to grow at 15 per cent till FY20, helped by the improving macroeconomic environment and government focus on infrastructure and rural areas, according to a report.

The report finds market opportunity for NBFCs stemming from continued government investments in roads, expected finalisation of the scrappage policy or the voluntary vehicle modernisation programme and higher budgetary spends for the rural sector.

“We expect the vehicle finance portfolio of NBFCs to grow 300 basis points ( bps) faster over the three financial years to 2020, clocking a compound annual growth rate ( CAGR) of 15 per cent, compared to 12 per cent saw in the past three years,” Crisil said in a report released on Monday.

In terms of segments, around 85 per cent of NBFCs’ vehicle finance portfolio comprises commercial vehicle ( CVs) and car/ utility vehicle ( UVs) financing. The balance includes tractor and two/ three wheeler financing.