Drop in EMI collection hits leasing finance companies

The collection of equated monthly installment (EMI) on heavy commercial vehicles financed by various leasing companies in the state are down by about 20 per cent in August 2011 compared to the same month in the previous year.

Heavy rainfall, especially in mining areas, during the last couple of months has severely hit the operation of heavy commercial vehicles in these areas.

“Normally the collections are down during the monsoon season due but the fall in collection was particularly sharp this year due to incessant rain in the mining areas which has affected mining activities and left the roads badly damaged. As a result, the EMI collection are down by 10-20 per cent, said Ramalinga Prasad, Assistant Manager, Customers Relations, Sundaram Finance Ltd, a non banking financial company.

 

He said, two out of every three customers, to whom the company has advanced loans, is a defaulter. Those dumpers used to unload three trips in 15 days are doing only one trip.

It may be noted, between June and September, Orissa received three percent below normal rainfall while in Keonjhar and Sundergarh districts the rainfall was above the normal, according to data collected from the meteorological office.

Due to heavy rainfall and water logging, the excavating activities in the mineral rich regions had come to a standstill and same is the case with earth moving vehicles, mostly used in mining areas.

There is 20-25 per cent reduction in EMI collection from the customers, said Ashok Behera, Assistant Manager, Asset Recovery Management, Srei Equipment Finance Private Ltd.