MUMBAI: Non-banking finance companies have seen their sanctions drop by Rs 15,751 crore to Rs 3.85 lakh crore in the September quarter from about Rs 4 lakh crore in the June quarter. The decline was led by a drop in loans against shares, short-term and gold loans, data released by the Finance Industry Development Council and credit bureau CRIF showed.
Compared to the same quarter in the previous year, the sanctions were up 3% or by Rs 11,154 crore, with personal and consumer loans growing the most year-on-year. However, gold loans have been declining on both sequential and year-on year basis.
Last year, RBI barred large non-banking finance companies from giving more than 50% of the value of shares pledged by borrowers. This resulted in the sanction of loan against shares dropping 77% (Rs 2,030 crore) to Rs 853 crore in the second quarter of the current fiscal from Rs 2,966 crore in the second quarter last year.
For NBFCs, home loan sanctions have been flat, growing 1% over the first quarter of FY24 and shrinking by 2% over the second quarter of the previous year. This is attributed to a slowdown in the low-value affordable segment where most NBFCs operate.
The highest year-on-year growth for NBFCs continues to be in personal, consumer, and education loans. Personal loans have grown 32% year-on-year and 10% quarter-on-quarter, with sanctions of Rs 64,778 crore in the second quarter of FY24. Consumer loans have shrunk by 12% quarter-on-quarter but have grown 26% year-on-year.
Education loans have grown 74% over the previous quarter and 164% over the year-ago period to Rs 12,422 crore. Auto loans experienced a sequential decline of 15% and a year-on-year growth of 3%, with a significant decrease in the sanctioned amount, reflecting a challenging period.
Gold loans faced a quarter-on-quarter decline of 30%, despite a 9% annual growth. This could indicate shifting preferences in borrowing or fluctuations in the gold market. The short-term loan category shows signs of stress and saw a substantial quarter-on-quarter decline of 55% and a staggering year-on-year decrease of 62%.
