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45-50 pc MSMEs have opted for moratorium: Report
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SME Times News Bureau | 07 May, 2020
As several private banks along with few public sector banks extend the
term loan moratorium to non-banking finance companies (NBFC), an Emkay
report has said that asset-side issues were more pertinent for NBFCs,
rather than the persistent liquidity concerns.
In the report,
Emkay Global Financial Services said in its discussions with smaller
unlisted NBFCs and co-operatives across states indicate that they are
availing bank moratorium, assignment, securitization and obtaining fresh
borrowings to ride through the current liquidity challenges.
It
further said that contrary to popular belief, most private banks and
some public sector banks are extending RBI term loan moratorium to
NBFCs.
"However, we remain concerned about the potential
asset-side issues emanating from a consistent rise in demand for loan
moratorium and difficulty in collection and recoveries amid lockdowns,"
the report said.
It noted that 45-50 per cent of MSMEs and 75 per cent of vehicle loan takers have opted for the moratorium.
The
report said that there is some pent-up demand for working capital loans
which could trigger incremental credit growth after lockdowns are
lifted.
"Demand for unsecured personal and business loans may
remain high initially; however, lenders will prefer to remain cautious,
which could impact the supply of credit," it said.
With the
recent dip in lending rates for most banks, a trend of balance transfer
would prevail, especially in mortgages from smaller and regional NBFCs
to banks, it said.
The brokerage firm's report further said that
the impact of the ease in lockdown would be limited as the majority of
consumption in the country is driven by metros and tier-I cities, most
of which still remain as red zones.
The advantage would stay with
micro-finance institutions and service-based industries in green zones,
mostly rural areas where consumption is driven by local factors.
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