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"In India, where weakness in credit from non-bank financial companies is expected to linger, growth is projected to slow to 5 per cent in FY 2019/20, which ends March 31 and recover to 5.8 per cent the following fiscal year", the World Bank said in its January 2020 Global Economic Prospects.The World Bank assessment may have come from the trail of events where, despite government intervention, credit disbursals by the NBFCs have not taken place satisfactorily to the extent it should be. NBFCs are lifeline of rural demand as much of the Indian economy is informal where taking a bank loan is cumbersome for rural and tier II city population.Inadequate credit flow from commercial banks and non-banking financial companies (NBFCs) to industry has frequently been cited as a major constraint to growth.The Credit disbursals by the NBFCs have continued to slide despite government measures to boost bank funding to the sector. Loan sanctions fell 34 per cent in the September quarter, a year after the NBFC liquidity crisis that was sparked by the unexpected defaults at the Infrastructure Leasing & Financial Services (IL&FS).Total NBFC sanctions fell to Rs 1.9 lakh crore at the end of September from Rs 2.9 lakh crore during the same period last year, as per data compiled by the CRIF High Mark credit bureau and the Finance Industry Development Council (FIDC).The NBFCs play a pivotal role driving last-mile credit reach and the government has been ironing out glitches in fund flow and cost of funds to non-AAA-rated NBFCs to fix this issue.The Bank also painted a gloomy picture for the emerging economies as well as the advanced economies. As per government estimates India is expected to grow at 5 per cent in FY 20, a 11-year low. The Q2 growth has been just 4.5 per cent.Growth among advanced economies as a group is anticipated to slip to 1.4 per cent in 2020 in part due to continued softness in manufacturing.Growth in emerging market and developing economies is expected to accelerate this year to 4.1 per cent. This rebound is not broad-based; instead, it assumes improved performance of a small group of large economies, some of which are emerging from a period of substantial weakness.About a third of emerging market and developing economies are projected to decelerate this year due to weaker-than-expected exports and investment."With growth in emerging and developing economies likely to remain slow, policymakers should seize the opportunity to undertake structural reforms that boost broad-based growth, which is essential to poverty reduction," said World Bank Group Vice President for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu."Steps to improve the business climate, the rule of law, debt management, and productivity can help achieve sustained growth", the World Bank said.( With inputs from IANS )

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