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NBFC crisis has moved from sector to company level: Ramesh Iyer, M&M Financial

We find the lenders are more open and multiple source of bor..

We find the lenders are more open and multiple source of borrowing is possible but definitely the business models also have to dive deep and see if there are any gaps to bridge, says Ramesh Iyer, MD & VC, M&M Financial. Excerpts from interview with ETNOW.

What is the state of the NBFCs? While some NBFCs have continued to do well, others have taken a hit.
It is important to understand that these are business models which are very different from each other right and therefore what is one companys problem may not necessarily be other companys problem. Retail NBFCs all the time have had this very strong discipline of an ALM match and therefore the belief is that the retail NBFCs would not definitely have a similar kind of pressure. That is why we keep saying that it started off as a sectoral pressure, but as things start unfolding, it is becoming clearer as to whether this is an industry-wide problem or is it specific to a particular company.

If it is an industry-wide problem, I am sure the regulator will come out with certain approaches and announcements which will sort things out, but if it is company specific, then it is for the company to handle. I very strongly still continue to believe that it has moved from a sector to a company level and large companies which have been in the business and in retail do not have so much to handle.

Can we say that the situation is normal for other NBFCs or will it take some more time for the entire sector to normalise?
In order to call it normal, every entity in the ecosystem has to have the same approach — be it a lender, a borrower or an intermediary. Everyone has to have that view. I would not think at this stage that everyone has this view to say everything is good at every location but I would that if the deficit had gone to as low as may be 25%-30% level, it is in the right direction of being normalised completely. We do find the lenders are more open, we do find multiple source of borrowing is pRead More – Source
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