Maintaining liquidity is one of the crucial things that an individual or entity has to keep in mind at all times. The government has been working proactively and introduced several relief measures to assist the individuals and entities in managing the situations and tiding over the liquidity crunch.
NBFCs will recover soon with a substantial increase in credit demand
Mr. Nirmal Jain, Chairman & CEO of IIFL Finance, stated that the liquidity has started to improve with the reduction in the cost of funds. Acquiring and paying back the funds availed at a hefty rate was a matter of concern. Still, with the government providing concessions and several bank’s and non-banking financial companies waiving off certain charges, it has now become easy to get the facilities as and when needed.
Where several banks have claimed that in their quarterly report that they have witnessed a growth in their deposits and advances as the economy is set to recover.
On account of the Non-Banking Financial Companies (NBFC), Mr. Jain expressed his opinions that the sentiment is coming back in an assertive way. Acknowledging the current scenario, new players are not entering the credit market anytime soon. The people have started trusting and looking at the sector now. The demand for credit will start increasing as the economy recovers.
Looking at the demand in the time to come, Mr. Nirmal Jain is quite confident and believe that many of the Non-Banking Financial Companies will benefit a lot from the same. The Non-Banking Financial Companies (NBFCs) that have survived and weathered the storm have sound policies and structure supporting them.
Mr. Nirmal Jain further added that there was a great bounce back in affordable housing, but the most substantial demand has been noticed in gold and business loans. He said the average ticket size for a home loan was somewhere around Rs. 15-16 lakh.
Mr. Jain mentioned that IIFL Finance Ltd. had not made a move in the Mutual Funds market. Mutual Funds have not yet started lending to NBFCs, but banks have taken a keen interest in buying the retail assets. Mr. Jain is pretty sure that IIFL Finance has the liquidity sufficient for the payments of the next 9-12 months.