Custom Search

Tuesday, May 31, 2022

NBFC-MFI sector stressed assets drops 800 bps to 14% in March

Stressed assets of non-banking financial companies-microfinance institutions (NBFC-MFIs) has declined to around 14% as of March 2022 on account of improved economy and increased collections, Crisil Ratings said in a report.

The current stressed assets of NBFC-MFI, which include loans that were unpaid for more than 30 days, declined by 800 basis points in March from 22% in September 2021.

However, the stressed assets are significantly higher than the pre-pandemic levels of 3%.

“The reduction in stressed assets, along with improved collection efficiencies mark a recovery in the asset quality of NBFC-MFIs, supported by economic revival, limited impact of the omicron variant, and acclimatisation to the post-pandemic ‘new normal’,” the report said.

The new loan book of NBFC-MFIs, which include loans disbursed after July 2021, has witnessed stressed assets of up to 1-2%. Overall monthly collection efficiency averaged at 97-100% in the quarter ended March 31.

“The microfinance sector restructured 10% of its loan book…in the wake of the second Covid-19 wave, compared with a mere 1-2% in the first. The extent of this varied between entities from 2% to 17% and had a strong correlation with the regional impact of the second wave, which had affected the informal economy and rural India more drastically than the first,” Krishnan Sitaraman, senior director and deputy chief ratings officer, CRISIL Ratings, said in the report.

“Collection efficiency of the restructured book, billing for which began in the final quarter of last fiscal, is currently at 60-65%. This indicates higher probability of slippages,” he further said.



from "Banking & Finance News: Banking & Finance News Today, Indian Banking & Finance News, World Banking & Finance News Today - The Financial Express " | The Financial Express https://ift.tt/4xn3vTf

0 comments:

Post a Comment

Popular Posts

 
Desi Google | A2Z Famous Quotes | What's Cooking America | Joke Site