Industry Analysis

The Non-Banking Financial Companies (NBFCs) sector in India plays a crucial role in economic growth and financial inclusion by providing essential services to unbanked and underbanked populations. Valued at USD 326 billion in 2023, NBFCs account for 18.7% of the banking sector’s assets, an increase from 13% in 2013. This growth aligns with India's projected GDP of USD 7 trillion by 2030. The sector’s credit-to-GDP ratio stands at 12.6%, highlighting its significance in the financial ecosystem.

NBFCs are categorized into base, middle, and upper layers, representing 6%, 71%, and 23% of total assets. As of September 2023, aggregate lending increased by 20.8% year-over-year, driven primarily by personal loans and loans to the industrial sector, compared to a 10.8% growth in the previous year. Asset quality improved, with the gross non-performing assets (GNPA) ratio decreasing to 4.6% in 2023 from 5.9% in 2022, and the NNPA ratio falling to 1.5% from 3.2%. Capital adequacy rose to 27.6%, while profitability, measured by Return on Assets (ROA), increased to 2.9% from 2.5%. These trends demonstrate a resilient and growing NBFC sector in India's evolving financial landscape.
(Source: Industry Research Report and Annual Report)

Overview of HDB Financial Services 

Founded in June 2007, HDB Financial Services Ltd (HDBFS) is a leading non-banking financial company (NBFC) and a subsidiary of HDFC Bank Ltd. The company operates primarily in two segments: Lending, which accounts for 86% of its business, and BPO services, which make up the remaining 14%. The Lending division includes consumer loans, enterprise loans, asset finance, and micro-lending, while the BPO services focus on collection and back-office sales support. With a strong presence across India, HDBFS serves 15.5 million customers through 1,682 branches, solidifying its position as a key player in the country’s financial services landscape.