Quick Summary
As the Union Budget 2026-27 draws closer, expectations are mounting across India's non-banking financial company (NBFC) sector, which plays a critical role in funding small businesses, micro-entrepreneurs and the self-employed. With India aiming for a $5 trillion economy and the long-term vision of
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FAQ :
The NBFC sector's three main priorities for Budget 2026-27 are liquidity support, stronger recovery mechanisms, and tax relief.
The sector suggests creating a dedicated refinancing window for NBFCs, similar to the support for housing finance companies, and expanding credit guarantee coverage for MSMEs and micro borrowers.
NBFCs are seeking to align the SARFAESI Act threshold with that of banks and housing finance companies, proposing a reduction from Rs 20 lakh to Rs 1 lakh to improve recovery timelines.
The sector has proposed the removal of the 10% Tax Deducted at Source (TDS) on interest income earned by NBFCs.
NBFCs play a critical role in funding small businesses, micro-entrepreneurs, and the self-employed, especially those who face challenges accessing formal bank credit, thus supporting MSME lending and overall credit flow.
NBFC assets under management (AUM) are projected to grow between 12% and 18% in FY26, primarily driven by MSME lending, gold loans, and retail credit.
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