Need for reorientation
The nation's non-banking finance companies (NBFCs) are in an unenviable bind. Muscular banks and financial institutions have successfully invaded NBFCs' turf. These banks and financial institutions have access to low-cost funds and enjoy greater geographical reach.

Editorial -- Be a long-term player
NBFCs say the industry scenario is depressing. But, they need to understand that opportunities are plenty. It is high time NBFCs took a long-term view of their business. They need to develop fee-based business and get into niche financing.

No easy financing solutions
The going is getting tougher for NBFCs. Earlier, NBFCs were borrowing and lending at higher interest rates. This is changing now. With banks and financial institutions jumping on to the operational turf of NBFCs, lending rates have moved down while borrowing rates remain high. This is squeezing NBFC margins.

A question of survival
It is going to be a replay of the familiar. The NBFC sector is about to witness a major shakeout. Initially, it was during the Nineties that the NBFC sector saw some restructuring activity. And now, there are signs all around to tell an NBFC-watcher that the sector is in for another bout of consolidation.

Crawling into new niche areas
They never had it so bad. The nation's NBFCs are grappling with a host of problems that are threatening their very survival. Fund sources are drying up, their public image continues to remain tarnished, lending has become riskier, non-performing assets are on the rise.

Why this micro-management?
Too many regulations and many of them micro. That is the refrain of the nation's NBFCs. These finance companies have been around for long, but attempts to regulate them began only during the Sixties. The Banking Laws (Miscellaneous Provisions) Act 1963 was the first formal statute enacted to regulate the NBFCs.

Evaluating NBFC strengths
Evaluating NBFCs is a different ballgame altogether. For, NBFCs are different from manufacturing companies. Cash is not only their raw material, but their finished product too.

"The future belongs to strong financial service factories"
R Ravi is executive director of the Mumbai-based Alpic Finance, a major player in the Indian NBFC sector. His views on NBFCs and their business plans are refreshing at best.

"NBFCs need money on tap"
Dilip Pendse is managing director of the Mumbai-based Tata Finance. Pendse explores the various survival and growth options before NBFCs. Cost of NBFC borrowings are high. Conversion into banks is one option before NBFCs for reducing the cost of their funds.