Challenges Faced by NBFCs
Even though NBFCs play a critical role in economic growth, they are also faced with some challenges:
1. Regulatory Compliance
- Basic compliance with in-house laws such as RBI compliance norms, KYC laws as well as other requirements.
- Frequent legislative and structural adjustments make business operations difficult.
2. Competition
- Working with other institutions like banks, and fintech companies as well as other NBFCs
3. Resource Mobilization
- Raising funds to lend further at competitive rates.
- Maintaining a balance between liquidity and a good balance sheet.
4. Technology Integration
- Using online platforms for lending, interaction with customers and other operations.
5. Customer Acquisition and Retention
- Increasing the number of customers while also ensuring repayment of loans on time.
