Even though liquidity for non banking finance companies (NBFCs) has become more accessable compared to the last one year, it is the large companies that afford to borrow and many small and medium size NBFCs are still finding funding difficult, CEOs said in a panel discussion. “There is now a differentiation among NBFCs. Though rumours and fear mongering which we saw a year ago is not there now there are still problems which the smaller NBFCs are facing,” said Dinanath Dubashi, CEO at L&T Finance. Risk aversion among banks and investors still continues which means money is not cheap for small and medium NBFCs. There is risk aversion which means that mid level NBFCs which are not that bad are not getting funding. They have to sell their assets are pay off liabilities. The CEOs do not expect the liquidity issues to be solved soon but said there are some pockets where demand continues to be strong. They expect many small and medium NBFCs to find their own niche areas of financing to survive rather than lending to different segments.

(Economic Times)