NBFC Loan Book to Grow 15-17% in FY26 on GST Reforms, Says ICRA

According to a report by the credit rating agency ICRA, the non-banking financial companies' (NBFC) loan book in India is projected to expand by 15-17% in FY26. This positive outlook is primarily attributed to recent GST reforms and an improved liquidity environment. ICRA's analysis suggests that the recent GST rate cuts will bolster economic activity, thereby stimulating a greater demand for credit from both individuals and businesses. This is particularly beneficial for the retail and MSME sectors, which constitute a significant portion of the NBFC loan portfolio. The rating agency, however, also cautioned about potential asset quality risks in these segments, which could be offset by the reduced cost of funds for lenders.