Role Of NBFCs In MSME Sector

Non Banking Finance Companies NBFCs provide an estimated INR 0.57 trillion ($11.4 billion) of debt finance to the MSME sector. The size of credit disbursed ranges from INR 0.3 million ($6000) for micro enterprises to INR 50-100 million ($1 million – $2 million) for medium enterprises[81]. A large share of the finance is used for asset purchase. Analysis of the NBFCs’ MSME portfolio and primary research suggests that enterprises in transport business dominate the portfolio. Engineering, vendor supply chains and retail trade are among the other key industries served by NBFCs. NBFCs are companies registered under the Companies Act 1956 and engaged in business of loans, leasing and hire-purchase.