Benefits of incorporating NBFC - tradecareer.

                              BENEFITS OF INCORPORATING NBFC:

According to research and studies it is proved that NBFCs are outperforming banks. The continued better performance from NBFCs has given rise to an uptick of 15% customer satisfaction as compared to the banking customers.

The same is agreed by the RBI according to the recent Financial Stability Report. Banks and NBFCs are financial intermediaries and the services offered by them are pretty much the same as banks.However, the benefits of incorporating an NBFC and carrying on its activities are listed below:

1.Competitive Interest Rates:

Rate of interest is one of the main aspects of all types of loans.

Non-Banking Financial Sectors have started to concentrate on this area in the recent decades and have brought down the interest rates to either equal to bank lending rates or at times even lower to bank rates. 

With all the other benefits when rate of interest is also lowered, borrowers found this more easy and affordable.

                                                                              

2.Quick Processing:

At banks, it is very important that the applicant should fulfil the eligibility criteria but NBFC are lenient in this aspect.

This makes loan approval easier, smoother process and quicker. Most of the times, people apply for loan when they are in immediate need of money. 

NBFCs have taken this as an opportunity to meet the demand by quickly processing the loans at competitive rate of interest.

3.Less Rules and Regulations:

As NBFC are incorporated under the Companies Act, (though regulated by the RBI), the rules and regulations for lending are not as stringent as banks.

This helps borrowers to get loans easily. In view of less complicated loan processing requirements, borrowers are highly satisfied.

4.Loan available for Individuals with Poor Credit Rating:

Individuals with poor credit rating generally will not get loans from banks. The reason for this is banks consider borrowers are high-risk individuals if the credit score is low. 

Unless the credit score is above 600-650,it is very difficult to get a loan sanctioned from banks. 

On the other hand, loans will be offered to individuals with low credit score by NBFCs but most of the time the interest rates for such borrowers will be higher than market rates.

Due to these aforementioned advantages, most of the NBFCs are growing.