Mumbai, March 26 -- Non-banking financial companies (NBFCs) are turning increasingly cautious on lending as the war in West Asia raises concerns over funding costs, borrower stress and asset quality, five industry executives told Mint.

While the immediate impact of the ongoing conflict remains limited, non-bank lenders believe the real risk lies in a prolonged conflict, which could trigger second-order effects across inflation, demand and credit cycles.

"...we have started becoming very cautious but the war situation is also evolving. It's unfair for us to also pull down and stop the supply but we have to be very cautious in terms of lending and leverage," the head of a non-banking financial company said on the condition of anonymity. ...