30-day overdues in microfinance loans may double to reach 14-16%: Crisil

Collection efficiency of MFIs likely to drop to 75-80% in May, from 90-95% in March, creating asset quality pressures

The second wave of the pandemic and the subsequent curbs imposed by the authorities to stop the spread of the virus has had a negative impact on the collection efficiency of microfinance lenders and this, in turn, will result in a deterioration in the asset quality of such lenders.

According to rating agency Crisil, the 30 day-plus delinquency bucket or 30-plus portfolio at risk (PAR) in this segment may rise to 14-16 per cent this month from 6-7 per cent in March. Post demonetisation, in March 2017, this number had reached a peak of 11.7 per cent.

Collection efficiency of