Second Covid wave to push up NPAs for NBFCs, impact collections: Icra

Rating agency ICRA on Tuesday said that the second wave of Covid and the ensuing lockdowns would impact the non-banking financial companies (NBFCs) and housing finance companies (HFCs) and would increase their bad debts, and dip collection efficiencies.

According to the rating agency, 25-30 per cent of collections done by NBFCs and HFCs happen through field visits and largely via cash. The collections were ramping up after the first wave, but the second wave have stemmed that recovery.

ICRA said NBFCs reported NPAs to increase to about 4.5-5 per cent by March 2022 vis-a-vis about 4 per cent in December