Delays in repaying loans have increased in most of the world's credit markets

Mumbai, Ta. 24 December 2020, Thursday

Retail lending products in large and major lending markets around the world typically experience an increase in loan defaults. (Delay in repayment of loan for 30 days or more) Delay in loan repayment is critical in India and the impact of financial situation will take time to recover from the impact of lenders' support for relief programs and changes in consumer payment priorities.

Among the major retail lending products, credit card and property loans saw an increase in the default rate on loan repayments on an annual basis in August 2020, which was 21 and 3 basis points, respectively.

The rate of delay in credit card payments is reflected in the extended economic downturn, pay cuts and job losses due to the epidemic. Also credit cards often have a lower priority of payments, as consumers give higher priority to issuing other credit obligations.

Delays in repayment of commonly used product (property against loans) for small business financing for small businesses saw an increase in pre-Covid-12 epidemics and consequent lockdowns have had a major impact on the cash flow of small businesses and led to their issuance of loans. Capacity is reduced.

In contrast, August 2020 saw an annual improvement in auto loan repayment rates. It fell by 9 basis points to 3.91 per cent. Consumers are prioritizing auto loan payments to maintain utilities that provide personal transportation.

Many consumers are concerned about personal health when using government transport due to Kovid-18. Personal lawns also saw a basis point partial improvement. Which was mainly responsible for the significant reduction in lending risk capacity and the decline in opening new accounts after the Covid East and the epidemic.

World economic prospects appear to be improving as sentiment has improved in recent weeks with the announcement of various successful vaccine tests. With India's economic growth expected to pick up sharply in 2021, many key indicators are positive for consumers and lenders.

The impact of Covid-12 will change the strategy and risk-taking capacity of consumers and lenders. Improvements in the retail lending market will be largely influenced by the ability to successfully vaccinate and control epidemics on a large scale. The new wave of infection will continue to be felt and the global economy has changed a lot from which India is not excluded.