Why should a company take a loan from an NBFC instead of a bank?

There are some advantages of taking a loan from a Non Banking Financial Company (NBFC). As per the Financial Stability Report of RBI, NBFC’s are outperforming banks. There is more flexibility in availing a business loan from a NBFC. The amount sanctioned by NBFC can be higher than the amount sanctioned by a bank. You can read about the Types of Non Banking Financial Institutions – Functions & Objectives in the given link.

Further readings:

  1. NBFCs & IBC: RSTV – Big Picture Discussion on the RBI’s move to resolve NBFCs under insolvency law
  2. Insolvency And Bankruptcy Code (IBC) – IBC Amendment Bill 2021 [UPSC Notes GS III]

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