New Delhi, Sep 11 || India's top-rated finance companies (fincos) are projected to grow their loan books at 21-22 per cent over the next two years -- higher than 11-12 per cent for banking sector loan growth, thus grabbing market share from banks, a report said on Thursday.
One driver for the sector is its strong presence in retail lending, which is still underpenetrated in India, S&P Global Ratings said in its report.
Upper-layer fincos have strong capital levels, which will support high loan growth and provide downside buffers.
"We also expect earnings momentum to sustain, with slightly higher net interest margins over the next two years. This will add to the buffer," the report said.
"Stricter underwriting standards for India's fincos will rein in growth plans and defuse risk buildup for this financial niche," said S&P Global Ratings credit analyst, Geeta Chugh.