Archive · 23 Sep 2026
NBFCs Report Strong Loan Demand Despite Potential Funding Cost Pressure
Non-banking finance companies are businesses that lend money to people and companies.
A Jefferies report says many of these lenders are seeing strong demand for loans.
Their customers are also generally continuing to repay loans steadily.
Festive-season buying has started well, but the timing of major festivals may affect September results.
Higher interest rates could make it more expensive for NBFCs to borrow money.
Some lenders may respond by changing loan rates or offering different types of loans.
Jefferies expects their profit margins from lending to stay mostly stable in the near term.
Shriram Finance and Aditya Birla Capital still expect strong growth and controlled credit costs.
NBFCs reported healthy loan demand and resilient asset quality in the September quarter so far.
Early festive-season demand was strong, although festival timing could affect quarterly results.
Jefferies expects most NBFCs to maintain broadly range-bound net interest margins in FY27.
Potential interest-rate increases could raise funding costs, with loan repricing helping offset the impact.
Shriram Finance and Aditya Birla Capital retained growth and credit-cost guidance.
- Who
- Non-banking finance companies, including Shriram Finance and Aditya Birla Capital, discussed their outlook with Jefferies.
- What
- NBFCs reported strong loan demand and stable asset quality, while facing a possible increase in funding costs if interest rates rise.
- When
- The assessment covers the September quarter so far and was published on September 23, 2026.
- Where
- The findings were based on discussions at the Jefferies India Forum 2026.
- Why
- Sustained borrowing demand and stable asset quality support growth, while potential rate increases could make funding more expensive.
Growth and Resilience
Funding-Cost Risks
Sector outlook
Growth and Resilience
Healthy loan demand, encouraging festive trends and stable asset quality support continued NBFC growth.
Funding-Cost Risks
The timing of major festivals could affect September-quarter numbers, and performance may vary across lenders.
Interest rates
Growth and Resilience
Lenders may use loan repricing and changes in lending mix to cushion higher funding costs.
Funding-Cost Risks
Potential rate hikes could increase borrowing costs and put pressure on margins with some lag.
Credit costs
Growth and Resilience
Jefferies believes credit costs could surprise positively if current asset-quality trends continue.
Funding-Cost Risks
Credit-cost expectations depend on asset quality remaining stable, so deterioration could challenge current guidance.
- Source
- Jefferies report based on discussions with nine NBFCs
- Loan demand
- Strong across vehicle finance, consumer lending, MSME loans and other segments
- Asset quality
- Stable across most segments, including during the seasonally weaker September quarter
- NIM outlook
- Most NBFCs are expected to maintain broadly range-bound net interest margins in FY27
- Shriram Finance growth
- Expected assets under management growth of about 17% in FY27 and 18-20% in FY28-29
- Aditya Birla Capital growth
- Expected annualized growth of 25% over FY26-29
- Credit-cost guidance
- Shriram Finance retained 2%; Aditya Birla Capital retained 1-1.1%