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Struggling to Raise Funds for Your NBFC? Here’s What You Need to Know

  • 18-Jan-2026
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Struggling to Raise Funds for Your NBFC? Here’s What You Need to Know

Raising funds has become one of the biggest challenges for Non-Banking Financial Companies (NBFCs) today.
High borrowing costs, tighter RBI regulations, and limited access to traditional capital markets often slow down growth—even for well-run NBFCs.

But the good news is this: funding options for NBFCs are evolving.
With the right structure, compliance, and strategy, NBFCs can access sustainable capital and scale confidently.

Let’s break it down simply.

Why NBFCs Face Funding Challenges

Many NBFCs struggle due to a combination of factors such as:

  • Rising cost of funds from banks and financial institutions
  • Strict RBI norms on capital adequacy, asset quality, and governance
  • Limited credit history or short operational track record
  • Overdependence on a single funding source
  • Weak documentation or non-compliance with regulatory reporting

These challenges make it essential to diversify funding and adopt smarter capital strategies.

Key Funding Sources for NBFCs

Today, NBFCs can explore multiple funding avenues, including:

1. Bank Loans & Term Finance

Traditional but still relevant, subject to strong financials and compliance.

2. Non-Convertible Debentures (NCDs)

Ideal for medium to long-term funding with structured repayment options.

3. Securitization & Direct Assignment

Unlock liquidity by selling loan portfolios while improving balance sheet efficiency.

4. Co-Lending Arrangements

Partner with banks or fintechs to reduce risk and improve cost of funds.

5. Private Equity & Strategic Investments

Best suited for scalable NBFCs looking for long-term growth capital.

Each option has its own RBI guidelines, documentation requirements, and risk considerations.

RBI Rules You Must Know

Before raising funds, NBFCs must ensure compliance with key RBI norms, including:

  • Capital Adequacy Ratio (CAR)
  • Asset classification and provisioning norms
  • Proper governance and board structure
  • Timely regulatory filings and reporting
  • Compliance with scale-based regulation (SBR) framework

Non-compliance can delay funding or lead to outright rejection by lenders or investors.

Common Funding Challenges (and How to Solve Them)

Challenge: High cost of borrowing
Solution: Diversify funding sources and explore securitization or co-lending.

Challenge: Rejection due to compliance gaps
Solution: Regular RBI compliance audits and clean financial reporting.

Challenge: Limited investor confidence
Solution: Improve governance, transparency, and long-term business strategy.

How NBFC Advisor Can Help

At NBFC Advisor, we specialize in helping NBFCs:

  • Structure the right funding mix
  • Raise debt or equity capital
  • Improve lender and investor readiness
  • Ensure full compliance with RBI norms
  • Build sustainable, scalable financial models

📞 Contact Us for a Free Consultation

+91 93113 47006

Let us help you unlock the right funding—safely, compliantly, and sustainably.

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