Non-banking finance firm Magma Fincorp expects growth in commercial vehicle and equipment finance segments in the second half of next financial year (FY14) on the back of economic recovery, a top company official said.

"We see growth recovering in the second half of next financial year," Chief Financial Officer of Magma Fincorp, V Lakshmi Narasimhan said, adding that it will have tangible impact on commercial vehicle and equipment finance segments.

He also added that the growth in commercial vehicle finance and equipment finance were subdued across the sector due to the sluggish growth in the economy as of now.

Referring to disbursement in the current financial year, Narasimhan said the company is confident of achieving its disbursement target of 40 per cent in the current financial year.

He also said the cost of funds were likely to come down if the central bank cuts rates in its January policy review.

In the second quarter, the company had reported a 30 basis points decline in cost of funds, with its yield on advances increasing by 13 -14 basis points, taking its net interest margin (NIM) to 4.91 per cent during that period.

Talking about the proposed guidelines by RBI on NBFCs, he said reducing time period to recognise NPAs, increasing of risk weight on some assets among others were the areas of concern for the industry.