Collections of non-banking financial companies (NBFCs) have been adversely impacted due to widespread and more stringent lockdowns in May 2021, rating agency ICRA said.
“With 25-30% of collection through field operations, loan overdues are set to increase as regular collections and recoveries from overdues were impacted by the more extensive and stringent lockdowns implemented by various states during May 2021,” the rating agency said.
However, housing finance companies (HFCs), with a lower share of field collections, had been less impacted than the NBFCs, ICRA said.
Stating that NBFCs and HFCs felt the stress of the second wave COVID-19 lockdowns and movement restrictions, ICRA said the budding recovery in loan collections witnessed in the third and fourth quarters of FY21 had been stemmed.
“With most states implementing stricter lockdowns in the month of May 2021, collections efforts witnessed a major setback in May 2021, compounding the 5-10% (vis-a-vis March 2021) dip in…