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NBFCs must balance growth, governance and technology to build sustainable lending models: NBFC Honchos

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NBFCs must balance growth, governance and technology to build sustainable lending models: NBFC Honchos

NBFCs must balance growth, governance and technology to build sustainable lending models: NBFC Honchos

NBFCs must align lending growth with funding costs, asset quality and risk appetite as regulatory scrutiny and competition intensify, industry leaders said at the ETBFSI NBFC Leaders’ Retreat 2026. Technology-led efficiency, digital MSME lending and affordable housing emerged as key opportunities for sustainable expansion.

India’s NBFC s must move beyond aggressive loan growth and focus on profitability, stronger governance and disciplined risk management to remain competitive, industry leaders said at the ETBFSI NBFC Leaders’ Retreat 2026. At a panel discussion NBFC leaders highlighted how technology, changing customer expectations and regulatory requirements are reshaping lending models across microfinance, affordable housing and MSME financing. Lending models must deliver sustainable returns Anuj Pandey, CEO, UGRO Capital, said smaller NBFCs must identify underserved borrower segments where they can generate adequate returns, particularly as larger lenders benefit from lower funding costs and greater leverage. Advt

5% to attract capital for expansion, compared with approximately 2% for larger, parent-backed lenders, Pandey said. However, pursuing higher yields must not come at the cost of excessive credit risk. Deo Shankar Tripathi, Executive Vice Chairman, Aadhar Housing Finance, said lenders should build their businesses around their borrowing costs, target customers and risk appetite rather than compete with established players in segments where they lack scale. “Regulation always sets the right path for doing the right business. Regulation is always supportive. Regulation is never an obstruction,” Tripathi said, highlighting the importance of liquidity safeguards, asset-liability management and fair lending practices.


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