CRISIL: Asset Growth of NBFCs to Sharply Decline to 15-17% in FY25 and FY26

Current Context: The report is titled "NBFCs' AUM Growth May Slowdown to 15-17% in FY25, FY26" and was released by CRISIL Ratings on December 2, 2024.

• Key Points of the Report:
• Growth Projections: The report predicts a decline in asset growth for non-banking financial companies (NBFCs) to 15-17% in FY25 and FY26, down from 23% in FY24.
• Factors: The slowdown is attributed to regulatory changes, asset quality concerns, and funding challenges.
• Segments Affected: Unsecured loans and microfinance segments are expected to be most impacted.
• Strategic Recalibration: NBFCs will need to recalibrate their growth strategies due to intensified regulatory compliance requirements and weakening asset quality metrics.

Question:

1 According to the CRISIL Ratings report released on December 2, 2024, what is the projected AUM growth rate for NBFCs in FY25 and FY26?

• A) 23-25%
• B) 10-12%
• C) 20-22%
• D) 15-17%

Answer: D) The report predicts that NBFCs' AUM growth will slow to 15-17% in FY25 and FY26, compared to 23% in FY24, primarily due to regulatory and funding challenges.