NBFCs & housing finance.

NBFCs and housing finance companies form India's second-largest formal lending channel, extending ₹45 lakh crore of credit (13% of GDP) against ₹195 lakh crore for banks, and generating an estimated ₹4.5 lakh crore of gross value added in FY26 (1.4% of national GVA) on the same FISIM logic used for banks. The industry is barbelled: two government infrastructure lenders (PFC and REC) hold ₹12 lakh crore of loans at near-zero operating cost, while thousands of retail lenders (vehicle, gold, microfinance, consumer) earn 6-10% net interest margins with 3-5% operating costs, funded 35-40% by the banks they compete with. Reshaped by the IL&FS/DHFL defaults of 2018-19 and the July 2023 merger of HDFC Ltd into HDFC Bank (which removed roughly a seventh of the sector into banking), NBFC credit is again growing faster than banks' (about 15% in FY26) as retail credit penetration -- household credit is 35% of GDP versus 60%+ in East Asia -- still has room to run. Growth is capped by NBFCs' inability to raise deposits, which bounds expansion to bank lines and bond-market depth, and by regulation pushing the largest upper-layer NBFCs toward bank-like capital norms and potentially bank licences.

NBFC + HFC credit outstanding

45 ₹ lakh crore · Mar-26

NBFC credit / GDP

13 % · FY26

Estimated GVA (FISIM basis)

4.5 ₹ lakh crore · FY26

GVA as % of national GVA

1.4 % · FY26

Profit pool, all NBFCs

2.0 ₹ lakh crore · FY26

Listed 'Finance' sector PAT (Ace)

1.96 ₹ lakh crore · FY26

Market cap (Ace 'Finance' sector, Jul-26)

45.8 ₹ lakh crore · Jul-26

NBFC/HFC share of that market cap

~33 ₹ lakh crore · Jul-26