NBFCs' bad loans may worsen to 5-7% this fiscal due to weak economy: Icra

Non-banking financial companies' (NBFCs) asset quality is likely to worsen to 5-7 per cent in the current financial year due to weak economic growth on account of disruptions caused by coronavirus-related lockdown, according to a report by rating agency Icra.

The lockdown has significantly impacted the cash flow position of NBFCs' borrowers, it said in the report.

While the moratorium extended by the NBFCs to their borrowers is likely to give them the much-needed breathing space, their asset quality performance is likely to see sizeable dislocation from the recent trends, it said.

"Assuming a slippage of 5-10 per cent of