MUMBAI: India’s non-banking financial companies (NBFCs) are unlikely to face material disruption from the US-Iran war, as demand for credit remains robust, industry executives said at the Mint India Investment Summit 2026, held in Mumbai last week.
Shaji Varghese, chief executive officer of Muthoot Fincorp, said that of India’s 60 million small businesses, only 20–30% have access to credit, underscoring the critical role NBFCs play in bridging the gap. “That relevance is only further pronounced now. Because of the war I don't think this opportunity has weakened.”
NBFCs’ contribution to India’s total credit supply has grown to over 18% from 12% a decade ago, highlighting their significance in the financial system, Varghese added. NBFCs provide loans, credit, and other financial services similar to banks but do not hold a banking licence or accept demand deposits.
“Even in the current environment, the credit growth is expected to be around 16-17%. By the nature of the construct of the financial ecosystem, NBFCs have the last mile connectivity to enable the flow (of credit). We believe that the growth trend will continue,” said Ashish Mehrotra, managing director and chief executive officer of Northern Arc Capital.
Mehrotra cautioned, however, that some pressure could emerge at the margins.
“The income of the rural economy, emerging economy will see a little bit of contraction and that means it could have a potential impact on the performance of credit but the demand of credit isn't going away,” he said, adding that lenders must “act responsibly and act more vigilant” in meeting credit demand at scale.
Looking ahead, industry executives cautioned bankers to tread carefully amid global turmoil, while also noting new funding avenues may open for NBFCs.
“Access to money which NBFCs need, more doors will open. I think there is a massive opportunity to scaling the fixed income as a source for funding for NBFCs, which is a big desire. Cautious, calibrated growth is what we urge people to do,” said Mehrotra.
On gold price volatility, Varghese said it has not had a material impact on gold loan business.
“Gold price has been elevated for quite a while. But at a business level, we don't see a risk so far. Moderate or reasonable volatility in gold prices is not going to really create an unmanageable risk at the business level,” he said.
Gold prices, a key factor for lenders focused on gold-backed loans, have corrected sharply amid the West Asia war. Mint reported on 20 March that prices fell 12% in March and 17% from their peak of $5,595 per ounce in January this year.