August 14, 2023
Introduction
Non-Banking Financial Companies (NBFCs) play a crucial role in balancing the financial ecosystem among people who are not able to receive the benefits from traditional banking. NBFCs provide a wide range of financial solutions to help the various needs of customers.
The main difference between traditional banking and NBFCs is, unlike traditional banks, NBFCs don’t accept deposits from the public, however, they offer various other financial services to people. Be it a small venture or big organization, a team, or individuals, NBFCs provide specialized financial support that cater to individual customers’ needs. Let’s see how NBFCs cater to diverse customer needs.
NBFCs customized offerings to meet different customer requirements:
Various Loan Services:
NBFCs provide an opportunity for individuals to claim different loans based on their needs. Loan options such as personal loans, business loans, vehicle loans, and more without having to worry about mortgaging or LAP. These loans can be customized to specific customer needs.
Not everyone needs the same loan amount or duration, therefore including loan amount, repayment tenure, and interest rates, all services vary based on the client’s or customer’s requirement. NBFCs often have more lenient eligibility criteria than traditional banks, making it easier for a broader range of customers to access credit.
Microfinance and Rural Lending:
As mentioned NBFCs reach places that traditional banks won’t reach. They often focus on providing financial services to underserved and rural areas where people are deprived of facilities. NBFCs offer microfinance loans to small entrepreneurs, maybe in a team or to an individual who lacks access to formal credit.
Loans credited from NBFCs are usually smaller in size and cater to specific income-generating activities. You may create small groups of people by understanding the needs and skills you possess that help you build a small venture.
Individual Consumer Finance:
Not only for groups or businesses, but NBFCs also provide consumer finance options, used for purchasing household goods like electronics, appliances, and furniture.
The EMI may vary as they may offer zero or low-interest EMI (Equated Monthly Instalments) schemes, based on the purchases made of goods. This makes it easier for customers to afford these purchases.
Easy Mortgages and Housing Finance:
NBFCs specialize in housing finance that offers services for individuals to buy property and construction. Their housing loans feature will not be resembling the traditional banking sectors, they have personalized repayment structures and competitive interest rates. These options and features of NBFCs cater to diverse borrower needs.
By accepting various and innovative approaches, NBFCs provide accessible options for individuals and businesses seeking housing finance, which contributes to the real estate sector’s growth and meets the demand for affordable mortgage options.
Providing Capital Finance:
NBFCs offer to work on huge loans meant for businesses’ immediate financial needs. Where clients also can support their daily operations and purchases from service providers. These loans act as a bridge for cash flow gaps, ensuring smooth operations and timely payments.
With flexible terms & conditions and quick approvals, NBFCs help businesses manage short-term expenses efficiently. This specialized financing helps in optimizing working capital cycles and maintaining business continuity. Such services from NBFCs contribute to sustaining operations and promoting growth across diverse industries.
Investment services by NBFCs:
Some NBFCs offer investment services such as fixed deposits, mutual funds, and other investment options. These products will be more secure and provide more ROI when it comes to the banking sector.
These services not only help businesses grow but also help individuals cater to grow their wealth and achieve their financial goals.
Insurance Services, Trade Finance, and Supply Chain Financing:
NBFCs often partner with insurance companies to offer various insurance products, including life insurance, health insurance, and vehicle insurance. This helps customers mitigate financial risks and secure their future.
NBFCs facilitate trade finance activities by offering services like invoice discounting, factoring, and supply chain financing. This helps businesses optimize their cash flow and manage their trade-related transactions more efficiently.
Offers Foreign Exchange Services:
Not only for business purposes or financial benefits but NBFCs may also provide foreign exchange services for individuals traveling abroad.
These funds may involve in international trade of business and offer competitive exchange rates and facilitate currency conversions without any hassle.
Customized Repayment Options:
Unlike traditional banking, NBFCs never force their borrowers to repay instead they are known for their flexibility in structuring loan repayment options.
They often work closely with customers to design repayment schedules that align with their cash flows and financial capabilities. This provides all sorts of financial stability for the borrower without having to compromise their personal needs or health.
Financial Services Digitally:
You are not obliged to visit offline NBFCs for acquiring the services, many NBFCs take the aid of technology to offer digital financial services. This includes online loan applications, instant approvals, and digital payment solutions. This enhances convenience and accessibility for customers.
Conclusion:
Not everyone is privileged to acquire benefits from traditional banks. However, banks like NBFCs offer various services that reach underserved people from various parts of the country. NBFCs play a vital role in making people lead financially stable lives by offering customized solutions to meet the diverse financial needs of customers.
