Loans with over 30-day dues shot up to 10.9 per cent (of gross loans) in December 2020 from 2.42 per cent a year ago for micro credit extended by finance companies, mainly due to the Covid pandemic, Microfinance Institution Network (MFIN) data showed.
According to MFIN, loans with over 30-day dues were at 2.51 per cent in September. Industry executives said besides moratorium on repayments (during March-August), the Reserve Bank of India allowed restructuring of loans and finance firms did not recognise dues then. The clear picture about pain is emerging now.
There is a genuine repayment problem for many due to economic hardships owing to the pandemic. This is more so with old loans. Some skipped repayments hoping another round of assistance, impacting credit discipline, said officials.