Deep Scar In Consumer Finance

The novel coronavirus-induced pandemic since January 2020 is likely to moderate demand trends across consumer and personal finance loan segments in the current financial year and during Q2 and Q3 of FY21. Consumer spending across loan categories, such as personal loans and consumer loans, taken to finance small-ticket items like washing machines, dishwashers, heaters, refrigerators and air conditioners have been impacted badly due to factors like loss of jobs, salary cuts and continued uncertainty about the future. Both banks and NBFCs have also tightened their credit procedures and risk assessment systems to ensure that credit is offered only to customers with a good repayment track record. The scuttlebutt exercise done by some large NBFCs and banks reveal that credit demand is high but disbursements continue to show a slower growth as recovery and risk assessment of consumers are now...