Bharat Financial Inclusion reveals stressed loan book

Loan stress and gradual recovery to weigh in near term

Sheetal Agarwal 

On Monday, Bharat Financial Inclusion Ltd (BFIL) revealed rising stress on its loan book. And this is unlikely to be taken lightly by markets. Cash crunch from demonetisation and worsening repayment in Uttar Pradesh and Maharashtra have started pulling down loan quality. With the states in election mode, the buzz around possible loan waivers has gathered momentum and led to disruption in repayment cycle. Thus, the microfinance body now has Rs 306 crore or 4.5 per cent of loan book where there have been no payments for more than eight weeks. Though collections have started ...

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Bharat Financial Inclusion reveals stressed loan book

Loan stress and gradual recovery to weigh in near term

In a call with investors on Monday, the Bharat Financial Inclusion (BFIL) management revealed rising stress on its loan book or asset quality-an indication of a likely surge in non-performance assets (NPAs). And this is unlikely to be taken lightly by markets.To begin with, the cash crunch arising from demonetisation and second, worsening repayment discipline of borrowers in select states of Uttar Pradesh, Maharashtra have started pulling down its asset quality. Notably, with states in election mode, the buzz around possible loan waivers has gathered momentum and led to disruption in repayment cycle at the borrowers' end. Thus, the micro-finance institution, which lends to very small borrowers, now has loans to the tune of about Rs 306 crore or 4.5 per cent of loan book where there have been no payments for more than eight weeks. Though collections have started improving, the BFIL management believes it will take another couple of months for things to normalise from here on. It also .. On Monday, Bharat Financial Inclusion Ltd (BFIL) revealed rising stress on its loan book. And this is unlikely to be taken lightly by markets. Cash crunch from demonetisation and worsening repayment in Uttar Pradesh and Maharashtra have started pulling down loan quality. With the states in election mode, the buzz around possible loan waivers has gathered momentum and led to disruption in repayment cycle. Thus, the microfinance body now has Rs 306 crore or 4.5 per cent of loan book where there have been no payments for more than eight weeks. Though collections have started ... image
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