New Delhi The Corona Virus Crisis is causing many problems on the retail loans for lenders in India. Credit information company Transunion Cibil said that despite demand for personal loans and credit card loans, lenders are staying away from these segments due to concerns over asset quality. The company said lenders would prefer the low-risk home loan segment. But due to weak economic conditions, buying a house has become difficult and due to this the demand for these loans is coming down.
The CIC analyzed the data of the 2008–09 global financial crisis and estimated macroeconomic numbers before coming to a conclusion. Its Vice President (Research and Consulting) Abhay Kelkar said, “Despite the Government of India launching one of the world’s largest economic packages, the corona virus has a significant social, financial and economic impact and also realizes it to the retail lending market. Will happen.’
The CIC study shows that the financial position of customers has changed dramatically. Many people’s salary has been cut, so many have lost their jobs. At the same time, there has been a sharp decline in consumer sentiment, which has severely affected consumption demand and spending. “The economic impact of the current crisis will have a significant impact on retail credit growth and future estimates of asset quality,” the company said.
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The company said that the impact on asset quality due to corona virus outbreak is going to be quite complex. Asset quality of unsecured loans will be severely affected. The company further stated that some customers’ inability to repay their loans after the end of the moratorium period will affect their score and consequently the possibility of default can also be seen to increase.
The company said that asset quality for secured loans like home and auto loans would be better than unsecured loans like credit cards and personal loans.
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