has estimated a sequential 8-10% drop in collections in April 2021 and the identical could dip additional if the second wave can’t be managed.
Though some states have categorised the microfinance trade as an important exercise, the money flows of debtors could also be affected because of the restrictions / lockdowns, thereby affecting their repayment skill, the ranking agency stated.
“Consequently, the industry is witnessing a reduction in collections and the recovery seen in Q4 FY2021 is being challenged again,” it stated.
The enchancment in collection effectivity and pick-up in progress in property underneath administration in H2 FY2021 helped the trade witness a marginal enchancment within the overdue portfolio (0+ days late (DPD)) to 16.7% as on December 31, 2020, as in opposition to 18.1% three months’ earlier.
Among major states with excessive microfinance penetration, Assam had the very best delinquency fee by way of the 90+ dpd, which stood at about 20.3% as on December 31, 2020. Other main states specifically Maharashtra, West Bengal, and Kerala had 90+ dpd of seven.8%, 6.1% and 6.1% respectively as in opposition to the Pan India common of 4.9% in the identical interval.