SME Times News Bureau | 10 May, 2021
Delinquencies of microfinance institutions (MFI) are likely to increase
by June amid the severe Covid crisis, according to Acuite Ratings &
Research.
"Acuite expects 30 day delinquencies to increase at
least by 30 per cent by June 2021 even if the pandemic intensity starts
to taper down from the middle of May and may more than double if there
is no taper down of the pandemic intensity and the local lockdowns
continue till end of Q1FY22," said a report.
It noted that the
impact of the second wave has not only been in the large cities but also
in the hinterland, sparking a crisis in healthcare infrastructure.
While no national level lockdown has been contemplated yet as in last
year, the virulence of the second wave has led to lockdowns at local
levels in various states and the intensity of such lockdowns may
increase if the case load continues to increase further.
This has
already started to impact the improving trend in collections and
disbursements particularly from the second half of April 2021.
Given
the wider coverage of the virus across semi urban and rural areas in
this cycle, the risks of a sharper impact on the lives and livelihoods
of the micro-finance borrower is higher in the near term, it said.
