NBFC stands for Non-Banking Financial Company, which is a financial institution that offers banking services without meeting the legal definition of a bank. They provide services such as loan and advances, hire-purchase, leasing, and acceptance of deposits but don’t have the license to take deposits from public.
NBFC (Non-Banking Financial Company) and real estate are closely related as NBFCs provide financial services and support to the real estate industry. They offer loan products specifically designed for real estate such as home loans, construction loans, and loan against property. In addition, they also provide financing options for developers and individuals involved in the real estate sector.
NBFCs heavily contribute to the real estate sector in India. They help in attracting foreign investments, increase capital formation and also increase mobilization of resources. This means that savings can turn into investments, leading to more investments in the real estate sector. This indicates that the demand for real estate will see its peak in the forthcoming years, and hence property investments have the potential to offer much higher returns in the future.
Since the primary role of NBFCs is to lend to infrastructural projects, they largely contribute to the real estate industry. In the last few years, NBFCs have been sought after for infrastructural loans as opposed to the banks.
Hence, they continue to grant loans to borrowers who are looking to invest in housing and are a great alternative to banks.
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