Affordable housing loan defaults surge to 7.2%, says rating agency Icra

The ultimate losses to lenders could be limited, given the secured nature of loans

Feeling the effects of economic disruption from the second wave of the Covid-19 pandemic, delinquencies – 30-day plus dues – for affordable housing finance companies (AHFCs) shot up to 7.2 per cent in June, from 5.1 per cent in March.

Rating agency ICRA said the asset quality had already deteriorated in the aftermath of the first wave of the pandemic in 2020. The collections for these housing finance companies (HFCs) were impacted due to stricter lockdowns across various states in the first quarter (Q1) of 2021-22 (FY22).

Also, unlike the moratorium and restrictions on the bucket movement available in Q1 of 2020-21