New Delhi, Aug. 28 -- Asset reconstruction companies (ARCs) are seeing greater interest from non-bank lenders as they push clean up of their balance sheets and free up capital for fresh lending, industry executives said. The shift is also leading to ARCs getting more retail portfolios and smaller-ticket loans, they added. According to these experts and industry data, the migration is being fueled by a squeeze in corporate debt availability, faster deal execution by NBFCs, and expanding retail stress.

"There is now a gradual shift towards retail loans," said Hari Hara Mishra, chief executive of the Association of ARCs in India. "Retail is growing at a much faster rate. Because of that, there are more transactions originated by NBFCs (non-...