Economic slump may hit refinancing by Indian vehicle financiers: Moody's

A key risk for vehicle financing companies in India was their heavy reliance on short-term wholesale funding, the agency said

Global rating agency Moody’s on Monday said Indian vehicle financing companies, which heavily depend on short-term money, might face trouble in refinancing amid rapidly deteriorating macroeconomic conditions and tightening liquidity.

Vehicle finance companies in Indonesia and India were among the fastest-growing ones in Asia, benefitting from favourable economic and demographic conditions. But vehicle sales were now slowing as economic conditions worsened, Moody’s said in a statement.

A key risk for vehicle finance companies in India and Indonesia is their heavy reliance on short-term wholesale funding. This was highlighted by a default in September 2018 by IL&FS which triggered a liquidity crisis among