Paper Contents
Abstract
This research paper provides an in-depth study of the credit risk assessment and loan approval process followed by Non-Banking Financial Companies (NBFCs) in India, with a specific focus on Sankalp Finance (SFS Consultants), Raipur. The study explores how creditworthiness is evaluated, the step-by-step loan workflow, verification procedures, risk mitigation strategies, technological tools, and internal coordination among departments. It uses observation-based primary research supported by secondary literature to explain the practical functioning of credit assessment systems. The findings reveal that NBFCs use a combination of financial analysis, documentation scrutiny, behavioural assessments, and field verification to minimise default risk. The study concludes that structured, multi-level credit appraisal is crucial for sustainable lending operations in NBFCs.IntroductionNBFCs play an important role in India's financial system by providing credit access to individuals and small businesses who may not always qualify for traditional bank loans. With rising credit demand and increased financial inclusion, NBFCs have become key contributors to economic growth. However, lending exposes NBFCs to significant credit riskthe possibility that a borrower may fail to repay the loan.Credit risk assessment, therefore, becomes a crucial process that determines the quality and stability of an NBFCs loan portfolio. This study examines how credit assessment is carried out in practice, based on real-time observations during an internship at Sankalp Finance, a Raipur-based financial consultancy working closely with NBFCs.The internship provided exposure to day-to-day operations, loan documentation, customer profiling, verification processes, financial analysis, and approval mechanisms. This research paper blends academic concepts with practical insights to produce a comprehensive overview of the credit appraisalsystem.
Copyright
Copyright © 2025 ASHMEET KAUR BHATIA. This is an open access article distributed under the Creative Commons Attribution License.
