India’s Top 50 NBFCs Ranking 2017

For the first time, The Banking and Finance Post, Asia and Middle East’s premier magazine has come up with the ranking of India’s top 50 Non-Banking Financial Companies (NBFCs). The “India’s Top 50 NBFCs Ranking 2017” has been introduced with an aim to provide useful insights into this important segment of the economy, which is being streamlined to fund the unfunded.

NBFCs play a critical role in the Indian financial system. They provide services such as personal loans, housing loans, gold loans, insurance and loans for purchasing commercial vehicles, machinery, and farm equipment, among others. The ability of NBFCs to understand their customer profile, their credit portfolio and deliver customised products and services are driving their fast growth in India.

NBFCs are also crucial for achieving the ‘Financial Inclusion’ goals by offering lending services to the unbanked population in rural, semi-rural or few urban areas. These are also important source of financial services for the Micro, Small and Medium Enterprises (MSMEs) – the backbone of an economy like ours.

The experience of NBFCs in understanding the customers’ profile and analysing their credit needs has been invaluable. Moreover, like most of the other segments of India’s financial sector, NBFCs too are transforming rapidly by using digital technology to improve customer interface.

A recent report by the Microfinance Institutions Network focused on adoption of ‘cash-lite’ models among MFIs in the country revealed that over 60 per cent of the NBFC-MFIs have adopted cashless methods to disburse money.

All this guided us to carry out an objective ranking of NBFCs in the country. Through our methodologies, we have tried to break the barriers of demography. Our rankings, as you will find, are spread across the length and breadth of the country and not limited to the metros and big cities alone. It is hoped that the ranking will be equally beneficial for NBFCs and those touched by them.

Ranking Methodology:

“India’s Top 50 NBFCs Ranking 2017” was carried out on the basis of three parameters: Annual turnover, social media engagement and customer satisfaction. As is evident by the name, under the annual turnover parameter, Non-banking financial companies were ranked based on their yearly turnover. Under the other two parameters – social engagement and customer satisfaction – the NBFCs were ranked on the basis of the result of our survey and the perception score.

Top 50 NBFCs ranking is a unique benchmark. Based on the scores secured by the NBFCs under the parameters, the cumulative score of all the institutions was calculated. The NBFC with highest cumulative score was ranked first, while the institution with lowest score was ranked last.

Ranking Parameter

Annual Turnover

Non-Banking Financial Companies (NBFCs) are fast emerging as an alternative to mainstream banking. They are playing an integral part in the Indian Financial System and have immense potential to take forward the Central Government’s agenda of financial inclusion.
Their contribution to the economy has grown exponentially over the years. As a matter of fact, the growth of NBFCs is not just driven by traditional products like commercial vehicle financing, but also financial products like personal and housing loans, etc.

The growth of the sector is accredited to cost efficiency, bad debt control, customised products and better customer services. In terms of annual turnover for financial year 2016-17, NBFCs have scripted a great success story. The financial assets of NBFCs have recorded a compound annual growth rate (CAGR) of 19 per cent over the past few years, comprising 13 per cent of the total credit which is expected to reach nearly 18 per cent by 2018-19.

Keeping the continual growth of NBFCs in mind, India’s Top 50 NBFCs Ranking 2017 considered the annual turnover as one of the parameters in judging their level of excellence.

Customer Satisfaction

Banking operations are increasingly becoming customer dictated. As far as Indian finance sector is concerned, financial institutions offering one-stop integrated financial services are on the rise. There is an intense competition in the market to gain customers. Therefore, the leaders in Indian banking domain are not only competing with each on the price factor, but also how their customers feel about their services.

Realising the customer satisfaction as the most important factor to become a business leader, all Non-banking financial companies are focusing more on better services, improved financial plans for customers and more engagement with their clients. Perceptionbased ranking under this parameter helped us determine how satisfied the customers are with NBFCs’ services

Customer Value Improved Service Quality:
In the current economic scenario, NBFCs are rendering efficient services to gain competitive advantage and, thereby, enhancing their customer relationship. The NBFCs are emphasising more on creating loyal customers by customising their services to serve their customers better as per their needs. This in turn is expected to pave the way for achieving greater customer satisfaction to a larger extent.

In the era of ICT (Information, Communication and Technology), the mode of direct pay, online financial services have gained value which leads to flexible hours of operation as per customers’ needs. Increased market competition is resulting into higher defection rates of customers.
Thus, research on service quality and satisfaction of customers in finance sector is considered important.

Handling Customer Expectations:
Meeting customer expectations plays a central role resulting into higher satisfaction ratings for any service provided by NBFCs. However, the NBFCs also have to handle negative perception about their services and have to constantly make improvements to keep their customers satisfied. At the same time, it is also true that the nonbanking institutions can improve their ratings where customers have positive preconceptions and high expectations for the services.

Social Media Engagement

In this digital era and consumption of information on the move, social media is playing a key role in social engagement not only in terms of communication with clients but also in building a brand value in the targeted domain.

Today, people and organisations remain connected and updated through various social media networks like Facebook, Twitter, Linkedin and others. The perception-based ranking under this parameter helped us determine how well Non-banking financial companies are socially engaged with their customers.

Digital assets across web, mobility and social media is also assisting nonbanking institutions to build customer advocacy and customer-centricity approach. Being an integral player in the financial segment, NBFCs, like their banking counterparts, are making optimum utilisation of social media in reaching out to their customers.

Connectivity: Social engagements through different social media channels help NBFCs enhance their connectivity with customers. As the target customers of NBFCs mainly are Micro, Small and Medium Enterprises (MSMEs), social media proves to be an excellent platform for them to connect with these enterprises. Moreover, various social media channels can also be used constantly by NBFCs for communicating with their clients by promoting and sharing relevant information.

Community Building: Social engagement is a great way to reach out to potential customers and enterprises. The community thus formed helps Non-banking financial companies to showcase their products and services even in remote locations of the country.

Stimulate Knowledge: Social media networks have wide reach and NBFCs are using these networks to keep their target audience updated. NBFCs also use social media as an opportunity to effectively fill knowledge gaps by sharing relevant information. Having an online presence helps strengthen connectivity without any limitations on proximity.

Check out our latest NBFCs Ranking 2018

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