#nbfc loans

NBFCs are empowering borrowers with fast and easy financial solutions 💰. At Corpbiz, we share how you can benefit from NBFC loans — get quick funds 💸, enjoy low-interest rates 📉, and skip heavy paperwork 📝.

We also explain how tools like Account Aggregator License Online, PPI systems, and P2P Lending platform offer safer, digital-first borrowing 🛡️. Don’t miss how the NBFC Registration Process creates trust in this growing market!

🔍 Explore Corpbiz services for your NBFC setup today!

Despite the significant contribution made by MSMEs to the country’s GDP and overall growth, these players struggle to secure loans from formal sources. (Image: pixabay) Credit and Finance for MSMEs: The MSME sector has remained a key driver of large-scale employment generation and also a lucrative hub for India’s innovative startups. Being home to 60 million enterprises, this sector contributes…

consider venturing a Nidhi company –

Ease of formality- incorporation of Nidhi Company is very easy.

Ease of management- You don’t any higher authority permission to bring about any changes to the company.

Venturing a financial organization with a sole purpose to provide loan/finance in India is easy now with Nidhi Company formation. A Nidhi company is a finance providing institution just like an NBFC but with simpler formation and registration process.

It also enjoys specific benefits as compared to NBFC in respect to taxes and annual compliance. Furthermore these companies can proceed for transactions only with registered members.

Its scope is limited to the RBI. Directors here also enjoy many benefits as compared to other NBFCs.

Learn more about registration process of a Nidhi Company and consult our experts to know how it will benefit you more.  

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The way our lives progress make it almost a certainty that at some point in time, each of us can fall short of money for an essential requirement. This requirement can take shape in various forms – money needed to buy a new home or office, funds required to finance expanded business operations or even money needed to pay for your child’s wedding.

While most of us prefer to borrow money privately from friends and relatives, these may prove inadequate at times. Hence, it is more prudent to approach banks and Non-Banking Financial Companies (NBFCs) in case one needs a loan. Banks have traditionally been the source of loan products for people, but this mindset has slowly changed over the years. Customers have realised the value of taking an NBFC loan instead of a bank loan.

The primary operational difference between NBFCs and banks is that NBFCs do not issue cheques drawn on themselves. Hence, they are not a part of the payment and settlement chain. Banks have conventionally charged a lower rate of interest on loans, but NBFCs have now surmounted this issue by borrowing from debt markets. Today, the interest rates between NBFC loans and bank loans are almost the same.

Customers find that NBFCs process their loan requests much faster than banks do. The former entity conducts quicker supervisory and background checks, which results in faster disbursal of funds. Thus, an NBFC loan is a better option for customers seeking quicker liquidity.

Banks are seen to give lower loan amounts than NBFCs, because they only count the property value as per current rates in their calculations. As opposed to this, an NBFC loan is higher because the loan counts property value, stamp duty and registration costs that the applicant has paid when computing the loan amount.

There are various kinds of NBFCs so the customer must choose the right one for his need. The categories operational currently are Finance, Infrastructure Finance, Systematically Important Core Investment (SICI), Investment and Loan.

Budget 2015: NBFC within the Scope of the SARFAESI Act

One of the most talked about issues on the political front, apart from the Delhi State elections, was the Budget 2015. It seems that Finance Minister Arun Jaitley has brought a lot of hope for the Indian economy, and experts around the world have applauded the framework. A noticeable move by the Minister was to allow the scope of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 to include non-banking financial companies (NBFCs) as well. So, NBFCs holding assets of more than Rs 500 crores will now be able to use the Act for the recovery of NBFC loans and other non-performing assets.

The Minister’s Point

According to Jaitley’s budget speech, the move was aimed at bringing the much required uniformity in regulation. So, now non-banking institutions can come under the same terms as the other banks; especially when it comes to recovery of NBFC loans. The same is also applicable to the registered micro-financing companies (secured individual lending companies). They will also have uniformity in treatment when it comes to recovery.

Why was this Necessary?

Non-banking finance companies were brought under the SARFAESI Act, so that they will be able to ensure both growth of their business as well as confidence on the part of the investor.

Prior to the Budget 2015, NBFCs were not able to follow the process given by the SARFAESI Act for recovery NBFC loans and treatment of non-performing assets (NPA). The Act prescribed the process for recovery of NPAs, without the intervention of the court, which the other banks were able to follow. So, NBFCs only had the option of filing with the district courts, which was a lengthy and tedious process.

The Benefit of the SARFAESI

Apart from simplifying the process, it also instills faith among investors. This is because these institutions were very stringent about the deployment of NBFC loans, to avoid the incidence of NPAs. The move will also let these institutions relinquish strict guidelines, so that many classes of investors can avail loans.

Even without the scope of the SARFAESI Act, NBFCs were able to broaden the access to financial services, catering to many classes of investors (including SMEs). The move will also enhance the competition in the economy and provide a solid base for diversification and growth. These institutions will be able to broaden their scope of lending, and will soon be able to effectively finance SMEs and SSIs.