What do entrepreneurs, professionals, and working-class people have in common? They’re all parts of the Indian population that have historically had trouble accessing traditional bank loans. Today, many of them turn to a lively sector that works alongside banks, called Non-Banking Financial Companies (NBFCs), to meet their financial needs.
In the financial landscape, NBFC companies in India have grown from small players to key institutions, holding about a quarter of all bank credit. There are around 9,420 registered NBFCs, and their assets are expected to surpass ₹48 lakh crore by FY25. This sector has become a vital alternative source of credit, supporting India's economic growth and helping those who often fall outside the mainstream financial system.
The Reserve Bank of India (RBI) defines NBFCs as companies registered under the Companies Act of 1956 or 2013 that mainly focus on financial activities like offering loans, buying securities, leasing, hire-purchase, and insurance. However, this technical definition doesn't fully capture their real significance.
The key point is what RBI calls the "50-50 test." A company is considered an NBFC if more than half of its assets are financial, and more than half of its income comes from those assets. This rule ensures that only companies deeply involved in financial activities are regulated by the RBI.
What really makes NBFCs stand out is how they operate: quick decisions, little paperwork, and a customer-first approach. They’re often more flexible than traditional banks, allowing them to serve niche markets and customers that banks find too small or difficult to reach.
While both NBFCs and banks offer financial services, they play different but important roles.
Demand Deposits: Unlike banks, NBFCs can't take deposits from people who want easy access to their money, like checking or savings accounts, because they are not part of the official payment and settlement system.
Payment System Participation: NBFCs can't write checks on themselves or be involved in the clearing system.
This means that different types of lenders have different ways of working. NBFCs are experts in certain areas and with certain types of customers. They create special ways to evaluate and approve loans, which help people who might not get credit from regular banks.
The non-banking financial companies in India have shown strong growth and resilience, now a huge industry worth over ₹48 lakh crore and still expanding rapidly. Here are some signs of their growing presence:
NBFCs are expected to grow by about 15-17% annually until FY28, which is faster than their past decade's average.
About 58% of their lending now goes to retail customers, especially in areas like consumer durables, gold loans, and personal loans.
Investors have shown lots of confidence, with private sector investments reaching a record US$9 billion in the first half of 2025.
This growth shows how NBFCs are reaching new markets and finding trustworthy borrowers using new ways to assess credit, different from traditional banks.
The NBFC sector is changing its approach. After new rules in 2023-24, which made unsecured consumer loans riskier, many NBFCs are shifting focus to secured assets. Smaller fintech NBFCs are pulling back from unsecured business loans and looking to sell or bundle existing unsecured assets.
This shift shows that the industry understands that steady growth depends on carefully managing risk. The numbers support this: from June 2023 to June 2025, the percentage of very low-risk borrowers in NBFC-fintechs increased from 20% to nearly 29%, while high-risk borrowers dropped from about 38% to less than 29%. This suggests that lenders are now better at assessing risk and practicing more disciplined lending.
NBFCs like Indel Money do a great job of helping more people get access to financial services. They are especially good at reaching parts of the population that regular banks often struggle to serve profitably.
Microfinance Institutions: Non-Banking Financial Companies-Microfinance Institutions (NBFC-MFIs) have done better than banks in microfinance, especially after the Reserve Bank of India lifted the limits on how much they can charge in interest. This change allows them to set rates based on the risk involved, which helps them stay sustainable.
Rural Outreach: Some companies like Indel Money have set up large networks in small towns and villages in India. They give loans to people who might not have access to regular banks.
MSME Financing: NBFCs are important sources of funding for small businesses. Companies like Indel Money create specific financial products to help these businesses grow.
This focus on inclusion isn't just about being kind; it shows a smart understanding of India's population and economy. Many growing parts of the country haven't been well served by banks before, and now it's becoming clear that future growth will come from these areas.
As we look toward the future, several trends will define the next phase of evolution for India's NBFC sector:
Digital Transformation: Using data analysis will make lending easier and faster. Some non-banking financial companies (NBFCs) already look at different types of data to decide who gets credit. Recently, the Reserve Bank of India (RBI) hasn't mentioned revolving credit lines in its drafts, which may mean they are cautious about certain online lending options.
Green Financing: More and more NBFCs are investing in eco-friendly projects like electric cars and renewable energy, supporting the country's goals.
Regulatory Evolution: Starting in April 2027, implementing expected credit loss (ECL) provisioning will help NBFCs improve how they manage risks. This will encourage many of them to tidy up their financial records ahead of time, making everything clearer and more organized.
Consolidation and Specialization: The industry will probably keep merging bigger, especially as rules like higher net owned fund requirements make it more important to have a larger scale.
The government's rules seem designed to balance progress and stability, promoting new ideas while keeping things safe, encouraging everyone to participate while being careful. India's NBFCs (non-banking financial companies) are no longer just an alternative to banks; they are now a key part of a diverse and strong financial system.
As India aims to become a $5 trillion economy, NBFCs will be even more important in driving fair and inclusive growth. They combine the discipline of formal finance with the understanding of India's unique needs, making them crucial for the country’s development. They’ve shown that making money and helping people access finance can go hand in hand, through innovation and smart operations, they can build sustainable businesses while empowering more people financially.
Gold prices in India are likely to stay supported in the near term as long as global uncertainties around the US, Russia–Ukraine, Iran and China remain elevated, and investors continue to treat gold as a safe‑haven asset.
Yes, prices remain volatile. But as investors in the yellow metal, it is better to focus on discipline and asset allocation rather than let short-term headlines sway your ship.
With ongoing tensions in the Russia–Ukraine war, concerns around Iran, and renewed trade and geopolitical frictions involving the US and major economies, the global risk sentiment continues to be more or less fragile.
If we look at history, it is during such periods that international gold prices go up. In fact, internationally, gold hit fresh record highs of $4,700 per ounce recently. So if global investors have a great appetite for the strong safe-haven asset that is gold, why shouldn’t you?
As Indians, we know how our society is interlinked to gold. We, as a nation, are one of the world’s largest consumers of gold. And, domestic prices closely track global trends, adjusted for the rupee and taxes.
In January 2026, retail 24‑carat gold prices in India hover near all‑time highs, with quotes moving from around Rs 13,500 per gram at the start of the year to above Rs 15,000 per gram in the third week of the month. This is because the India demand remains firm, along with global support for the increasing gold prices.
Whether you need funds for a medical emergency, education, business expansion, or any unexpected expense, borrowing money is an important financial choice. Two of the most common options available in India are personal loan and gold loan in India. Each has its own advantages and potential drawbacks, and the right choice for you can make a big difference in your financial health.
At Indel Money, we believe informed decisions lead to better financial outcomes. This comparison will help you understand which option, gold loan or personal loan, is better suited for your needs.
A gold loan is a secured loan where you pledge your gold jewellery or coins as collateral with a lender in exchange for funds. The value of the loan depends on the purity and weight of the gold you offer.
Because the loan is backed by a tangible asset, lenders often provide higher loan amounts with comparatively lower interest rates. You retain ownership of your gold, and it is returned to you once the loan is repaid in full.
A personal loan is an unsecured loan, which means it does not require any collateral. The lender approves the loan based on your credit score, income stability, and repayment capacity.
Personal loans offer flexibility in usage. You can use them for virtually any purpose. However, since there is no asset securing the loan, interest rates tend to be higher than secured loans like gold loans.
One of the biggest differences between gold loans and personal loans lies in the interest rate.
Gold loans generally offer lower interest rates because they are secured by gold. This reduces the lender’s risk and allows them to provide more affordable borrowing options.
Personal loans come with higher interest rates since they are unsecured. Lenders price in the additional risk, which can increase the overall cost of borrowing.
Gold loans are sanctioned based on the value of the gold pledged, usually up to a certain percentage of the current market value. If you own gold, you may be eligible for a substantial loan with minimal documentation.
Personal loans depend heavily on your credit score, income level, and financial history. Even borrowers with strong credit profiles may face limits on the loan amount.
Gold loans are often processed faster, as the approval is primarily based on the valuation of gold. In many cases, funds can be disbursed on the same day.
Personal loans require income verification and credit checks, which can extend the approval process, especially if documentation needs review.
Both gold loans and personal loans offer flexibility in how the funds are used. However, personal loans are generally perceived as more flexible, as they do not involve collateral or restrictions related to pledged assets.
Timely repayment of both gold loans and personal loans can support a healthy credit score. On the other hand, missed payments or defaults on either type of loan can negatively affect your credit profile.
With a gold loan, failure to repay may result in the lender selling the pledged gold to recover the outstanding amount. This makes repayment discipline especially important.
Personal loans do not put physical assets at risk, but defaults can still lead to legal action and long-term damage to your credit score.
