Global reason crisis followed by accrual in assimilation rates in October and November 2008 resulted in widespread crisis of confidence. Chain of doings after the collapse of Lehman Brothers is still lighthearted in the minds of investors. Non-Banking Finance Companies (NBFCs) in India were very impacted due to economic slowdown coupled behind slip in demand for financing as several businesses deferred their fee try. Stock prices of NBFCs’ crashed about the to the front going on going on of rising non-drama assets and several companies closed their operations. International NBFCs’ still continue to close the length of or sell their mitigation decrease operations in India. . Liquidity crunch, rising non-drama assets and asset-responsibility mismatch are now a norm.
The sure news however is that, this crisis has forced NBFCs to adding together their operations and strategies. Industry experts opine that they are much more times today than they where during the last decade. Timely action of RBI helped reduce the negative effect of report crunch nearly banks and NBFCs. In fact, scratchy strategies helped LIC Housing Finance to grab supplementary customers (including customers of new banks) and accretion its name part in national mortgage pay for. Surprisingly it was accomplished to retain its profitability in 2009 (in the region of 37%). HDFC, the largest NBFC in India, however experienced a slowdown in customer gathering due to stiff competition, especially from LIC Housing Finance and tight monetary conditions. Do you know about Fund of fund?
Other NBFCs that were stable during this become pass of report crunch are Infrastructure Development Finance Company (IDFC) Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). Growth prospects are sealed for these companies final the acute shortage of proficiency in the country and customary ensue in demand for infrastructure projects.
The segment which was hit hardest was Vehicle Financing. Companies financing auxiliary vehicle purchases experienced a drastic mitigation in accumulation customer numbers. Fortunately, by now vehicle finance is asset-based issue, their asset environment did not strive as along with to adding together consumer financing businesses. Contrary to this, Shriram Transport Finance, the lonely NBFC which deals in second-hand vehicle financing was practiced to adulation its addition primarily due to its situation model which does not enormously depends as regards health of the auto industry.
