Risks
Asset Quality Deterioration: Non-performing assets (NPAs) arising from borrowers' inability to repay loans, impacting profitability.
Interest Rate Risk: Mismatch between borrowing and lending rates, or adverse movements in interest rates affecting net interest margins.
Funding & Liquidity Risk: Difficulty in accessing funds at competitive rates or managing short-term liquidity, especially during market tightening.
Regulatory Changes: Stricter norms from the RBI regarding capital adequacy, asset classification, provisioning, or governance could impact operations and profitability.
Competition: Intense competition from banks, other NBFCs, and fintech companies.
Economic Downturn: A general economic slowdown can lead to reduced credit demand and higher loan defaults.