siliconindia | | MARCH 20248NBFC, which stands for Non-Banking Financial Companies, aren't just keeping up with the digital times; they're determining how money works, acting as the builders of financial change. They provide perfect services, handle risks like pros, and truly understand the Indian money scene. NBFCs are a big deal in the financial world now. In simple terms, these are money-helper companies in India. In India, the Increasing Relevance of NBFCs in Today's Digital Age is experiencing growth. They do a lot of things like lending money, providing credit, dealing with investments, and other money-related activities. And they're not only noticeable in urban areas; they're also leaving a considerable mark in smaller towns tooThey're helping out people with limited access to banks ­ small businesses, startups, farmers, and those who might struggle with traditional banking. Basically, they're the financial leaders in the economic story of our country, especially where there are no big banks around. NBFCs are growing significantly, and one of the main reasons is that more and more people in India want to borrow money. Now, the regular banks haven't been lending as much lately, according to the Reserve Bank of India. That's like a slow-motion situation. But NBFCs stepped in as leaders and filled the gap in lending. They're helping smaller businesses that traditional banks might be missing out on.Indian Government Boosts NBFCs with Digital InitiativesThe Indian government is aiding NBFCs in engaging in these challenges, particularly in providing to individuals who usually don't use banking services, implementing initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY), Mudra Yojana and, Stand-Up India. Their struggles include providing financial support to NBFCs and supporting Housing Finance Companies (HFCs) and Microfinance Institutions (MFIs). Additionally, the government has introduced schemes such as partial credit guarantees and other measures to encourage the sector's expansion. These are like unique plans to give money services to people who don't have much access to regular banks. And NBFCs are right there, making sure these plans work and providing loans to the people who need them. Everything is going digital, right? NBFCs are riding that wave, too. Smartphones and the internet are using digital actions to make things super easy for us. You can now apply for loans, get money, and pay it back online. They're also using smart computer things to figure out if it's safe to lend money to someone.NBFCs and FinTechs Transforming IndiaNBFCs, or companies that provide financial services without being traditional banks, have changed a lot recently. They're adapting to stricter rules and a changing financial world. They're now focusing on specific markets and creating personalized services for groups that didn't get much attention before. To do this, they're using technology in smart ways. They're teaming up with big financial players and innovative FinTech companies to save money and reach more customers. FinTechs are significantly influencing India's financial sector, gaining recognition for their creative utilization of technology. They play a role in the government's goal of including more people in the financial system. Using modern tech, they're changing how lending, managing assets, and handling credit work. Those companies are using technology to tackle challenges like reaching people in remote areas, creating new ways to assess credit, spotting fraud, and ensuring they follow the rules. Traditional financial companies are also benefitting from technology, as it helps them with tasks like accounting and managing money more efficiently.FinTech-NBFC Collaboration: FinTech companies are using super-fast technology to make borrowing easier and fixing problems that traditional banks and NBFCs (companies providing financial services without being banks) are slow to solve due to old systems. Banks and NBFCs are trying to catch up, but it's tough because they have old-fashioned setups and rules. However, they are still trying to be innovative. To keep up with changes and what customers want, NBFCs are teaming up with FinTechs, which are good at using new technology. This way, traditional NBFCs bring experience, and FinTechs bring speed and modern tech. It's like teamwork to make things better and faster for everyone involved.Ashish Sethi, Deputy Vice President of Supply Chain Finance, Yubi, says, "While traditional models EDITORIAL EXCLUSIVETHE INCREASING RELEVANCE OF NBFCs IN TODAY'S DIGITAL AGE
< Page 7 | Page 9 >