New Delhi, March 12 -- India's non-bank financial companies (NBFCs) are expected to expand faster than traditional banks over the coming decade as lenders adopt artificial intelligence and expand into new loan segments, according to a research report by Nomura.

Banks currently dominate India's lending system, accounting for more than 70% of total credit as of FY25, while NBFCs hold a much smaller share. However, Nomura forecasts NBFC credit will grow at roughly 17 per cent annually between FY25 and FY35, compared with about 12 per cent growth for bank lending over the same period.

"We note that AI can help NBFCs identify potential prime customers and bring about more efficiency in high-intensity product segments at a transformative pace...