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NBFCs seek special fund from govt for providing 3-5 yrs term loans

Industry body says funding is currently available only for 6-18 months under various schemes

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Abhijit Lele Mumbai
With constraints faced in getting funds, non-banking finance companies (NBFCs) want government to set up dedicated fund to provide them with three-five years’ term loans which will help manage asset liability match effectively. 

Finance Industry Development Council (FIDC) said the average tenure of loans extended majority of customers (individuals and MSMEs) is 24-48 months. However, funding under the partial credit guarantee scheme, special liquidity scheme, and refinancing by SIDBI are for a short tenure of 6-18 months only.

Hence, it is imperative that NBFCs need to borrow for a commensurate period in order to maintain a healthy asset liability match.

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First Published: Sep 18 2020 | 8:44 PM IST

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