InvestorQ : Why are NBFCs and HFCs seeking more funding support from the government?
Anu Biswas made post

Why are NBFCs and HFCs seeking more funding support from the government?

Answer
user profile image
Neelam Naik answered.
3 months ago


This demand has specifically come from the financially stressed NBFCs and HFCs that do not have easy access to funding lines. Such financial entities are seeking nearly Rs.10,000 crore from the government to bail them out of the current crisis. This is part of the special scheme launched on July 01 with an outer limit of Rs.30,000 crore.

Till date, applications for nearly one-third the amount have been received. The first application has been approved and the others are under review at this point of time. This was revealed by SBI, which is administering this scheme on behalf of the government. Even under ECG Scheme for MSMEs, banks sanctioned Rs.120,000 crore out of Rs.300,000 crore.

The more stable NBFCs have easy access to funds. But, it is the smaller and relatively stressed NBFCs that are worried about the possibility of a spike in bad loans once EMI moratorium is lifted. The EMI moratorium is expected to be lifted in the end of August and NBFCs and HFCs are expecting some pressure on repayment capacity of borrowers then.