Liquidity position strong, can cater to liabilities for 6-7 mths amid COVID-19 crisis: SCNL

Microfinance lender Satin Creditcare Network (SCNL) on Tuesday said it can cater to liabilities for the next six-seven months, assuming a scenario of zero collection due to the COVID-19 pandemic, and its liquidity stood at Rs 1,600 crore at March-end 2020.

The company said its liquidity position is one the highest in the country's micro finance institutions (MFIs).

In addition to the Rs 1,600 crore liquidity position, the company said it has undrawn sanctions of Rs 900 crore as on March 31, 2020.

The lender has raised Rs 6,426.6 crore during the year (ended March 2020) of which about Rs 400 crore was raised since the nationwide lockdown this includes Rs 50 crore of subordinated debt (tier II capital) from a foreign investor," according to a regulatory filing.

SNCL said that with the current levels of liquidity, company is comfortable in serving all its outside liabilities for next six-seven months assuming an extreme stress testing scenario of zero collection over this unprecedented period.

The company also said that it has been reaching out to all its borrowers via calls, text messages and WhatsApp to inform them about the ongoing situation and explained them the importance of social distancing, staying indoors and hygiene.

"We are continuously counselling them... The company has assured full support throughout this period to all our borrowers," it added.

The Gurugram-headquartered micro lender also said that it will offer moratorium to all the existing borrowers across India.

The borrowers can choose to either pay or avail moratorium. If the borrower avails moratorium, the incremental interest and the increase in the loan tenure would be explained to the borrower, it added.

Catering to 22 states in 391 districts, the company said 97 per cent of the districts have less than 1 per cent exposure.

"Nearly 80 per cent of our portfolio is in rural areas where there is no major impact of the pandemic. Majority of our portfolio has not been impacted as it is lent to borrowers engaged into activities of animal husbandry and agriculture allied services.

Recoveries from these borrowers (engaged in essential services) are expected to be much faster," SCNL said.

As a strategy, once the lockdown opens partially/fully "we are open to support our customers by giving emergency loans to kick start their business".

Further the company said that it has quickly launched digital collections in the current lockdown situation as well, which has seen a tremendous traction and scale.

Stock of Satin Creditcare was trading 1.46 per cent higher than its previous close on BSE at Rs 62.55 apiece.