NBFC Market Outlook (2025–2034): Growth, Trends, and Opportunities
The global non-banking financial companies (NBFC) market is forecast to grow from USD 218.88 trillion in 2024 to USD 259.48 trillion by 2034, expanding at a CAGR of 2.15%. NBFCs, which provide financial services without a traditional banking license, are crucial in facilitating loans, investment, and insurance services, especially in underserved regions.
NBFCs are gaining prominence by offering services such as personal loans, SME & commercial loans, and microfinance. In India alone, NBFCs disbursed over INR 2 trillion in personal loans in 2023. Increasing urbanization, rising middle-class income, and tech adoption are driving demand.
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Growth Drivers:
Fintech Integration: Use of AI, e-KYC, and mobile apps to enhance efficiency.
Consumer Finance Boom: Two-wheeler, appliance, and smartphone financing are increasing.
Digital Lending: Co-lending partnerships and app-based disbursals enable scale.
Key Example: Bajaj Finance and Capital Float saw a 30% YoY growth in app-based customer onboarding in 2025.
Asset Quality Risks: Exposure to high-risk borrowers increases NPAs.
Liquidity Constraints: Funding mismatches and risk aversion limit lending capacity.
Moody’s noted in 2024 that NBFCs in emerging markets are under pressure due to tighter funding.
Co-Lending with Banks: Blends banks' capital strength with NBFCs' market reach.
AI & Embedded Finance: Tech-led scoring and alternative data help scale lending affordably.
By Type: NBFCs-ND (dominant), NBFCs-D
By Service: Lending (leading), Investment, Insurance, Leasing
By Deployment: Hybrid (largest), Online (fastest-growing)
By Application: SME & Commercial Lending (dominant), Consumer Lending
Asia-Pacific leads due to financial inclusion efforts and digital adoption. India, China, and Indonesia show robust NBFC activity. North America follows, driven by strong demand for auto and consumer lending and fintech-NBFC hybrids like Affirm and LendingClub.
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Bajaj Finance Ltd.
Shriram Finance
LIC Housing Finance
Mahindra Finance
Muthoot Finance
Indiabulls Housing Finance
Aditya Birla Finance
Piramal Capital & Housing Finance
AI-Powered Lending: Use of RPA and AI for real-time credit decisions.
Green & ESG Financing: Loans for EVs, solar energy, and sustainable housing are increasing.
Q1. What role do NBFCs play in financial inclusion?
A: They offer credit access to underserved sectors like MSMEs and rural populations.
Q2. Are NBFCs regulated like banks?
A: NBFCs face regulation but not as stringently as banks. However, rules are tightening globally.
Q3. What makes NBFCs different from banks?
A: NBFCs can't accept demand deposits and don’t have access to central bank liquidity windows.
Q4. Which NBFC services are most in demand?
A: Lending services, especially personal and SME loans, are top contributors to revenue.
Q5. How is technology shaping NBFC operations?
A: Digital platforms, AI-based underwriting, and mobile apps are improving speed and scale.