NBFC balance sheets may reach ₹93 trillion by FY28, says Brickwork Ratings

Brickwork Ratings expects NBFC balance sheets to expand to ₹92.9 trillion by FY28, while warning of rising stress in unsecured and rural credit segments

The balance sheet size of non-banking financial companies (NBFCs) is expected to reach ₹92.9 trillion by the end of 2027-28 (FY28), reflecting growth of 16 per cent between FY26 and FY28, according to a report by Brickwork Ratings. However, the sector could face rising stress in unsecured and rural credit segments going forward.

 

Total assets in the sector stood at ₹61.1 trillion in FY25, implying annual growth of nearly 15 per cent in NBFC balance sheets through FY28. “The growth so far has been supported by robust loan demand across retail, micro, small and medium enterprises (MSMEs), and services segments,” the ratings agency said.

   

“India's NBFC sector maintains a stable outlook, supported by moderated but resilient credit growth, improving asset quality, and ongoing digital integration. On a more near-term basis, the sector enters FY27 with widening performance gaps as strong headline growth contrasts with rising stress in unsecured and rural credit,” said Hemant Sagare, director of ratings, Brickwork Ratings.

 

Over the longer horizon, non-performing asset (NPA) trends will depend on disciplined credit expansion, stronger governance, a greater focus on secured lending and robust monitoring systems, the report said. It added that the sector faces growing challenges from its continued reliance on wholesale funding, rising borrowing costs and a tightening regulatory environment.

 

The report noted that while secured portfolios have remained resilient, unsecured retail and microfinance segments continue to face stress. Provision coverage moderated to 66.6 per cent in FY25 from 69.1 per cent in FY24 as asset quality improved and lenders normalised buffers built over the previous two years.