Collection efficiency for retail, SME loans improves to pre-Covid levels

Icra cites decline in fresh Covid-19 cases, accelerated vaccination and uninterrupted operations of finance and housing finance entities for the better show

Collection efficiency of loans extended by finance companies, including overdues from the most-affected asset classes such as microfinance and SME, reached close to 100 per cent in September 2021 from a low of 80 per cent in May 2021.

According to rating agency Icra, monthly collection efficiency for securitised retail pools improved significantly during Q2FY22 due to the continued decline in fresh Covid-19 infections, a high share of vaccinated population and uninterrupted operations of finance and housing finance entities.

The harder bucket delinquencies, i.e. 90-plus days past dues (90+ DPD) have declined across asset classes. Given the healthy collection trend,