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Emerging technologies, fintechs hold great promise for propelling NBFCs to greater heights: Karad

New age NBFCs have demonstrated effective use of emerging technologies to grow customer base and extend support services, said Union Minister of State for Finance Dr Bhagwat Karad.

“I have a lot of hope in the emerging technologies and fintechs in taking the NBFC sector to newer heights, which is powered by efficient regulation and agility. Many NBFCs have gainfully deployed technologies as enablers for achieving growth in business. NBFCs should utilize technologies through various partnerships for different tasks and services to customers,” said Karad, who was speaking as Chief Guest at ‘NBFC Conference & Awards 2022’, organised by the Banking Frontiers group, at Sofitel Mumbai.

Karad assured full government support to the NBFCs, which are providing credit to the needy at a reasonable price, with transparency. He indicated government support to NBFCs in their pursuit of financial inclusion. Delivering the keynote address Karad said, “The government through the banking sector has been supporting NBFCs with capital and regulations. I assure that our government will do everything possible to support the entire spectrum of NBFCs in their endeavour to achieve greater heights in the years to come. Our government under the dynamic leadership of Prime Minister Narendra Modi has been very responsive and proactive to address the needs of all the sectors of the economy, and requirements as well as aspirations of people of the country.”

Appreciating the fact that NBFCs have proved themselves to be credible alternative to banks, providing last mile reach and delivery, with greater penetration especially in rural and semi urban areas, Karad further said: “The total credit extended by NBFCs and HFCs (excluding infra-financing entities) is estimated to have grown by 9.5% in FY2021-22. Aggregate credit extended by NBFCs is estimated to be around Rs 28.5 trillion at the end of FY22.  The sharp growth of about 12% in the NBFC wholesale segment is noteworthy. NBFCs continued to provide maximum credit to the industrial sector followed by retail, services, and agriculture. Credit growth to the services sector has improved significantly to 12.8% in June 2022 as compared with 4.0%, a year ago, mainly due to increased offtake to NBFCs, professional services, transport operators and trade. The profitability of the NBFC sector has been improving. The growth estimates for NBFCs and HFCs (excluding infra) may be pegged at 9% to 11 % in the current FY. I urge all the stakeholders of the NBFC sector to perform better than the last FY and aim for achievements higher than these estimates.”

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