Though the NBFC’s have been around for a long time, they have recently gained popularity amongst institutional investors, since they facilitate access to credit for semi-rural and rural India where the reach of traditional banks has traditionally been poor.
NBFC’s have also had a major impact in developing small business in rural India through local presence and strong customer relationships. Usually the loan officers in such NBFC’s know the end customer or have a strong ‘informal’ understanding of the credibility of the borrower and are able to structure their loans appropriately.
Few of the advantages of NBFC are listed below:
Provides loans and credit facilities
Supporting investments in property
Trading money market instruments
Funding private education
Wealth management such as Managing portfolios of stocks and shares
Provides retirement planning
Advise companies in merger and acquisition
Prepare feasibility, market or industry studies for companies