According to Centrum Institutional Research, the net interest margin (NIM) of vehicle finance is expected to compress by around 20-60 basis points in FY24. "Historically, we have seen a negative correlation between interest rate hikes and demand. Given the underlying buoyancy in business and rising competitive intensity, we expect slower transmission of repo hikes by NBFCs, resulting in NIM compression," said Centrum Institutional Research in a recent report.
This has forced Non-banking financial companies (NBFCs) to look at other avenues. Besides, lenders like Mahindra and Mahindra Financial Services (Mahindra Finance) are looking to increase the share of their high-yielding used-car portfolio to enhance margins.
This story is from the May 17, 2023 edition of Financial Express Mumbai.
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This story is from the May 17, 2023 edition of Financial Express Mumbai.
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