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Amid the current performance/growth challenges seen in publicly traded non-bank financial companies, we conducted on-the-ground channel audits and spoke to various experts from NBFCs, fintechs and banks to get a sense of the sustainability of the current situation and its impact on profitability. /growth for incumbents.

Gold lending being the safest asset class with healthy margins has attracted immense attention among lenders over the past couple of years. The ensuing price war caused teasing rates to drop to ~7% from over 12% pre-Covid-19 for NBFCs.

Moderating gold prices and rising auctions further limited growth in FY22, with much of the growth coming from balance transfers. We are already seeing a rise in offered rates and expect prices to stabilize at higher levels as excess liquidity in the system diminishes.

Nonetheless, increased competitive intensity will affect steady-state returns for incumbents.

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