PremiumMUMBAI: The difficult phase for India’s non-bank financiers is largely over and lenders are optimistic about collections improving in the wake of unlocking by states, Emkay Global Financial Services said.
Vehicle finance segment remained the most vulnerable, but the credit cards segment performed better with borrowers preferring to hold on to liquidity, it said. The report pointed out concerns about a steep rise in stage 2 assets similar to last year.
"Unlike last year, the RBI (Reserve Bank of India) has extended only limited support toward restructuring of loans which may result in a sharp surge in overall restructured portfolio for most NBFCs, including vehicle financiers. However, with regularization of economic activities, the trends may normalize by the end of FY22," it said.
Emkay Global said discussions with various collection agencies indicate encouraging trends in collection and recoveries across portfolios and geographies despite the hiccups caused by recent lockdowns amid the second wave of covid-19.
"Considering that the severity of lockdowns was relatively mild compared to last year, most businesses remained partly functional, witnessing only limited restrictions on movement of goods and services. Fully operational e-commerce channels have enabled even partial movement of non-essential items throughout this period, helping businesses take rather short time to ramp up activities and assume business-as-usual status," it said.
Also, with most lenders moving toward digital model for collections, absence of physical connect has not been a real dampener. According to Emkay Global, with the most difficult phase largely over, lenders are optimistic about seeing improving trends going ahead.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!