Auto loan firms hope for better after suffering in rural India's Covid pain

NBFCs and banks reported a rise in loan defaults when the pandemic's second wave hit the hinterland

After a quarter marked by a rise in delinquencies on auto loans, Non-Banking Financial Company (NBFCs) and commercial banks hope to do better in the second half of the fiscal as Indians shop for festivals and economic activity improves.

Amid lockdowns and restrictions for Covid-19, auto NBFCs saw their non-performing assets shoot up quarter-on-quarter as the second wave of Covid-19 reached the hinterlands.

Delinquencies were the sharpest in commercial vehicles (CVs), followed by three wheelers, and the entry level two-wheeler segment. Almost 80 per cent of three-wheelers and 45 per cent of two-wheelers are bought on credit in India, the