NBFCs consider loan disbursals from June, take optimistic approach

Non-banking finance companies (NBFCs) are preparing to sanction loans in June after the announcement of much-relaxed Lockdown 4.0 and the Centre’s recently-launched Rs 20 lakh crore stimulus package.

Big players such as IIFL Finance, Mahindra Finance, Shriram Transport Finance and Mahindra Finance are taking “cautious steps” while staying cognizant of the coronavirus impact on income levels, jobs and ability to repay loans, The Economic Times reported.

The companies have already started disbursing loans as clients demand that limits sanctioned in March be drawn down. For their optimistic view, companies expect double-digit loan growth for September and early December quarters, the report added.

Umesh Revankar, CEO - Shriram Transport Finance, told the paper they would resume loans from June. They see opportunity in the rural and semi-urban areas—which were less impacted by COVID-19, he said.

“Truck movements are going to rise, aided by the government’s stimulus package and easing of the lockdown,” Revankar said.

Edelweiss Group Chairman Rashesh Shah told the paper that clients were “gradually coming back”. The aim is to attain credit growth of 8-10 percent credit by the September quarter, he said. He added that Edelweiss would reopen 20 percent of branches in smaller towns by May-end and resume loan sanctions from June.

The others - Mahindra Finance and IIFL Group - are also on track. Mahindra is sanctioning loan requests from March and has seen requests incoming from rural farming companies. While IIFL has resumed operations at 1,800 branches and is sanctioning “digital loan transactions for existing customers with credit track record,” Chairman Nirmal Jain said.