NBFCs Cautious on Rural Lending Amid Weak Monsoon Fears

Mint · business

Non-banking financial companies (NBFCs) are adopting a more cautious approach to rural lending due to concerns over a weak monsoon and El Nino-related drought risks. These factors threaten farm incomes and borrowers' repayment capacities, prompting lenders to tighten monitoring and moderate disbursements in vulnerable regions. Major NBFCs like Shriram Finance and Mahindra Finance have flagged geographically concentrated risks, particularly in drought-affected western and southern India. While broad-based deterioration isn't reported, a more selective lending strategy is emerging as rainfall impacts cash flows.