Factors behind the growth of NBFCs in India

Explore the dynamic landscape of Non-Banking Financial Companies (NBFCs) in India and uncover the key factors driving their remarkable growth.
Factors behind the growth of NBFCs in India
5 min read
08 February 2024

Non-Banking Financial Companies (NBFCs) in India are financial institutions that provide banking services without holding a banking licence. They play a crucial role in the country's financial system, offering services like loans, investments, and wealth management. NBFCs are regulated by the Reserve Bank of India (RBI) to ensure financial stability. Several factors have propelled the growth of NBFCs in India, making them important players in the financial sector.

Leading NBFCs like Bajaj Finance Limited offer loans such as personal loans, business loans, doctor loan, and more with minimal documentation and simple eligibility criteria.

Factors behind the growth of NBFCs in India

Here are the key factors that have led to the expansion and success of NBFCs in the country.

Better consideration of untapped markets

NBFCs have been instrumental in addressing the credit needs of segments that are often underserved by traditional banks. Rural and semi-urban areas, as well as small and medium enterprises (SMEs), have witnessed a surge in demand for financial services. NBFCs, with their flexible approach and localised understanding, have been able to cater to these markets effectively, driving their growth in the process.

Innovative products and services:

The dynamic nature of NBFCs has allowed them to introduce innovative financial products and services, catering to the diverse needs of the Indian population. From microfinance to consumer finance and housing loans, NBFCs have tailored their offerings to specific market segments. This flexibility has enabled them to capture a substantial market share and establish a niche for themselves in the financial ecosystem.

Technology adoption:

The rapid adoption of technology has been a game-changer for NBFCs. Embracing digital platforms for lending, payments, and customer service has enhanced operational efficiency and reduced costs. Many NBFCs leverage data analytics, artificial intelligence, and machine learning to assess credit risk more effectively, streamline processes, and enhance customer experience. This tech-driven approach has given NBFCs a competitive edge in the market.

Partnerships and collaborations:

NBFCs in India have actively sought partnerships and collaborations with banks, fintech companies, and other financial institutions. These alliances have facilitated access to capital, expanded distribution networks, and allowed for the cross-selling of products. Collaborations with technology firms have also enabled NBFCs to stay at the forefront of innovation, contributing to their sustained growth.

Flexible regulatory framework:

The regulatory framework for NBFCs in India has been relatively flexible, allowing for diverse business models and structures. This flexibility has encouraged entrepreneurship and the entry of new players, fostering competition and innovation within the sector. The adaptability of NBFCs to different business models has played a crucial role in their growth and evolution over the years.

In conclusion, the growth of NBFCs in India can be attributed to a combination of regulatory support, market demand in untapped segments, innovation, technology adoption, strategic collaborations, and a flexible regulatory framework. As types of NBFCs in India continue to evolve and contribute to financial inclusion, their role in the Indian economy is likely to become even more pronounced in the years to come.

Bajaj Finance Limited is one of the top NBFCs in India offering personal loans of up to Rs. 40 lakh for various financial needs ranging from higher education, home renovation, medical emergency and more. In fact, there are very few restrictions on the usage of funds borrowed. You can choose the repayment tenure ranging from 6 months to 96 months, depending on your financial capability. In many cases, Bajaj Finance Limited gives instant approval on the personal loan application and disburses the funds in your bank account in just 24 hours* of approval.

Apply for a personal loan today

Bajaj Finserv App for All Your Financial Needs and Goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Explore and apply for co-branded credit cards online.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on No Cost EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more


While care is taken to update the information, products, and services included in or available on our website and related platforms/ websites, there may be inadvertent inaccuracies or typographical errors or delays in updating the information. The material contained in this site, and on associated web pages, is for reference and general information purpose and the details mentioned in the respective product/ service document shall prevail in case of any inconsistency. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/ service document and applicable terms and conditions. In case any inconsistencies are observed, please click on reach us.

*Terms and conditions apply