How NBFIs can boost MSME lending and India's growth

Beyond Banks: The Growing Influence of Non-Banking Financial Institutions Non-Banking Financial Institutions (NBFIs) are emerging as powerful catalysts for India’s next growth wave. They’re increasingly investing in emerging and small-scale enterprises — a clear shift from traditional, risk-averse lending models. This reflects growing confidence in grassroots innovation, regional entrepreneurship, and niche markets that conventional banks often overlook. From CreditAccess Grameen empowering rural women entrepreneurs, to U GRO Capital and Kinara Capital enabling MSME growth through digital-first credit solutions — NBFIs are bridging the financing gap with agility and purpose. Even larger players like Bajaj Finance and Tata Capital are adapting, expanding into small business and consumer segments through data-driven lending and flexible repayment models. As NBFIs deploy innovative, risk-tolerant capital, they’re not just funding businesses — they’re reshaping India’s financial ecosystem and redefining how growth capital reaches the real economy. #NBFI #fundraising #Beyondbanks #risktolerance #bajajfinance #tatacapital #emergingtrends #expandingbusiness

As someone from the NBFC ecosystem, I couldn’t agree more. NBFIs have demonstrated that speed, innovation, and customer understanding can coexist with strong governance and risk discipline. Our strength lies in reaching segments that traditional banking often finds uneconomical — MSMEs, emerging entrepreneurs, and new-age consumers. With evolving co-lending frameworks and digital credit infrastructure, NBFCs are not just complementing banks but actively shaping a more inclusive and responsive financial system for India’s next decade of growth.

Top NBFCs in India by Market Capitalization (2025) Non-Banking Financial Companies (NBFCs) play a major role in driving India’s financial growth — offering credit access, financing solutions, and wealth management services to millions. Here’s the list of top NBFCs by market cap 👇 🏆 Bajaj Finance leads the chart with a massive ₹4.5 lakh crore market cap, followed by REC, PFC, and Cholamandalam Investment. These companies are the backbone of India’s credit system — powering businesses, individuals, and infrastructure growth across the nation. 📊 Which NBFC do you think has the best growth potential in the next 5 years? hashtag Nuvama Wealth

Non-Banking Financial Companies (NBFCs) play a crucial role in strengthening India’s economy. While traditional banks cater to mainstream borrowers, NBFCs bridge the financial gap by reaching underserved and unbanked sections of society — including MSMEs, small traders, and individuals in semi-urban and rural areas. 💡 Why NBFCs Matter: • They provide accessible credit to small businesses, the true drivers of employment. • They promote financial inclusion by extending lending beyond urban centers. • They support key sectors like infrastructure, housing, and vehicle finance — directly contributing to GDP growth. • Their innovative, tech-enabled models ensure faster and more efficient credit delivery. NBFCs are not just financial institutions — they are growth catalysts that empower individuals, fuel entrepreneurship, and strengthen the nation’s economic foundation. #NBFC #FinancialInclusion #EconomicGrowth #Finance #Development #India

Private credit is reshaping India’s lending landscape. When traditional bank funding slows, private credit steps in, offering faster approvals⚡, structured terms 📄, and higher flexibility 🔁. Over the past year, India’s private credit assets under management (AUM) crossed USD 70 billion, growing at more than 25 percent annually. Family offices, pension funds, and alternative investment funds (AIFs) are actively financing mid-market companies that may not fit into standard bank criteria. For CFOs, this shift opens a new playbook: 💡Diversify funding by combining bank debt with private credit to create a more resilient capital structure. 🤝 Negotiate structure, not just rate, because private lenders focus heavily on covenants and control. ⏳Plan exits early, as private credit loans are often shorter-term and event-linked. At BankersKlub, our advisors help businesses evaluate private credit as part of their overall capital strategy, balancing speed with sustainability. Because the best funding option is not always cheaper. It is smarter. Rajat Chopra | Barnali Das | Abhinav Agrawal | Gaurav Kathuria | Rahul Bothra | Dechen Wangmo | Prof(Dr)Rajiv Kishore Dubey | Rajesh Kumar Yaduvanshi | #PrivateCredit #CorporateFinance #StructuredDebt #CFO #BankersKlub #StructuredDebt #AlternativeInvestments #PrivateDebt #CFOInsights #CapitalMarkets #InvestmentBanking #DebtAdvisory #FinancialStrategy #IndiaFinance

Bank of Baroda 𝐱 IIFL Finance: 𝐂𝐋𝐌1 𝐂𝐨-𝐋𝐞𝐧𝐝𝐢𝐧𝐠 𝐆𝐨-𝐋𝐢𝐯𝐞, 𝐏𝐨𝐰𝐞𝐫𝐞𝐝 𝐛𝐲 Knight FinTech We are proud to announce a breakthrough moment for India’s co-lending ecosystem with the successful go-live of the country’s first CLM 1, based under new RBI guidelines for Bank-NBFC partnership, on 𝐊𝐧𝐢𝐠𝐡𝐭 𝐔𝐭𝐨𝐩𝐢𝐚 𝐂𝐨-𝐥𝐞𝐧𝐝® This milestone engagement between Bank of Baroda and IIFL Finance marks a significant leap toward democratizing access to credit, especially for unbanked and underserved borrowers across semi-urban and rural India. The partnership aims to scale gold loan co-lending, enabling faster, simpler, and more affordable credit for agricultural and allied needs advancing the national agenda of financial inclusion. In alignment with RBI’s CLM1 framework, this model combines: ✅ Bank of Baroda’s capital strength and low-cost funding ✅ IIFL Finance’s on-ground reach and gold loan servicing expertise ✅ Joint underwriting and co-branded customer delivery ✅ A fully tech-integrated, real-time, transparent operating model With 𝐊𝐧𝐢𝐠𝐡𝐭 𝐔𝐭𝐨𝐩𝐢𝐚 𝐂𝐨-𝐥𝐞𝐧𝐝® at the core, both institutions now benefit from automated digital journeys, API integrations, real-time data sharing, stronger governance, frictionless reconciliation, and compliant platform ensuring speed with oversight, and innovation with trust. Our sincere gratitude to Bank of Baroda and IIFL Finance for placing their trust in Knight FinTech. A special thank you to Kirti Timmanagoudar (IIFL Finance) and Dhrubashish Bhattacharya (Bank of Baroda) for their belief, collaboration, and leadership throughout this journey. This achievement reinforces a shared conviction: When strong institutions and the right technology come together, scalable impact becomes inevitable. Onwards from here to unlock new segments, empower more borrowers, and build the next chapter of India’s co-lending growth story. #KnightFinTech #DigitalLending #FinancialInclusion #BankofBaroda #IIFLFinance #FutureOfFinance #GoldLoans #RBI #CLM1 #CoLending

From ₹778 Cr AUM in FY18 to ₹10,000 Cr+ in FY26 — SBFC Finance’s journey defines what focused execution in MSME lending looks like. A story of disciplined growth, solid governance, and purpose-driven profitability. Not every NBFC story is about scale — some are about stability with purpose. SBFC Finance grew 13x in just 7 years, keeping GNPA below 3%, RoE above 14% and 29% YoY Growth under the guidance of Founder, MD and CEO of SBFC Finance Limited Aseem Dhru 📊 Here’s infographic breaking down how SBFC scaled without losing quality. #FinancewithReshab #Finance #SBFCFinance #NBFC #MSME #Investing #Market #India #Credit #Bank #Indiancompany #LinkedIn Source: NSE India,Trendlyne.com, Google and others.

🏦 Why Investors Are Buying Stakes in Banks and NBFCs A New Era of Capital Transformation 📈🤝 India’s financial sector is witnessing a strong trend. Large domestic investors and global institutions are actively buying stakes in banks and NBFCs. This is not just deal making. It is a transformation of balance sheets and business models to make lenders future ready. 📌 What is Driving This Trend • Banks want more capital to fund credit growth and technology upgrades • NBFCs need deeper pockets to scale responsibly • Strategic investors bring expertise networks and governance strength • Stronger capital buffers support lending even in volatile cycles 📊 Recent Moves We Are Seeing in the Market • Private equity funds entering affordable housing and MSME focused NBFCs • Foreign institutions taking board level positions in niche lenders • Corporates looking at banking stakes to expand financial services reach • Small finance banks exploring mergers to become universal banks 🔄 The Bigger Shift Bank Capital Structure is Evolving Earlier banks relied mainly on deposits and internal profits Today they are building capital through: • QIPs and rights issues • Tier I and Tier II capital raises • Strategic stake sales to long term investors This means lenders get stronger capital adequacy plus operational agility to support India’s credit demand which is rising sharply across retail MSME and infrastructure sectors. 🌍 Why It Matters for the Economy • Bigger and well capitalised lenders can fund India’s growth aspirations • Governance improves as strong investors demand accountability • Innovation accelerates especially in digital and fintech driven lending • Risk management becomes sharper when ownership is diverse 💡 My View This is not just ownership change. It is a structural evolution of India’s financial ecosystem where capital strength technology capability and governance quality are becoming the real competitive edge. 💬 Do you think this investor led transformation will help Indian lenders match global banking powerhouses? Share your thoughts 👇 #Investments #Banking #NBFC #CapitalMarkets #FinancialSector #IndiaFinance #Governance #CreditGrowth #Fintech #LinkedInFinance

Public Sector Banks: From Lenders to Nation Builders In this episode of C-Suite Speaks, Rana Imam, a seasoned banking professional specialising in MSME and retail lending, shares a powerful vision for the future of India’s public sector banks (PSBs). “The future of public sector banks will not be written in boardrooms, it will be written in their corridors.” As India moves toward becoming a $5 trillion economy, PSBs are not just financing growth; they are empowering MSMEs, enabling infrastructure, and nurturing future leaders. Rana highlights how public sector banks stand apart not by profit margins, but by purpose, trust, and scale. By embracing digital onboarding, cash-flow-based MSME lending, green finance, and API-driven innovations, PSBs are transforming themselves into digital-age growth engines. With a credit gap of ₹20–50 lakh crores in MSME lending, Rana calls this not a challenge but an opportunity for inclusive innovation. Because when public sector banks transform, India’s economy transforms with them. 🇮🇳 #IronLady #CSuiteSpeaks #PublicSectorBanks #NationBuilding #MSMEGrowth #DigitalBanking #FinancialInclusion #GreenFinance #UPI #Leadership #EconomicGrowth #BankingTransformation #RanaImam #India5TrillionEconomy

Foreign capital is increasingly shaping India’s mid-sized banks, reflecting a strategic move by RBI to allow greater foreign participation in smaller lenders. Blackstone’s near 10% stake in Federal Bank for ₹6,196 crore and Emirates NBD’s 50% commitment to RBL Bank worth ₹26,853 crore are the latest examples. Earlier this year, IDFC First Bank raised ₹7,500 crore from Warburg Pincus and ₹2,624 crore from Abu Dhabi Investment Authority, while Yes Bank saw Sumitomo Mitsui acquire a 34.2% stake for about ₹15,000 crore. In total, these foreign inflows already exceed ₹50,000 crore, underscoring the scale and strategic intent behind such investments. These funds not only bolster capital adequacy and liquidity but also enable technology upgrades, stronger governance, and digital expansion. In a market dominated by larger banks, patient, long-term foreign capital is helping mid-sized institutions reinforce balance sheets and accelerate modernization, positioning them for sustainable growth in a rapidly evolving financial landscape.