45% customers have opted for loan moratorium: Finway
Finway, a Delhi-based NBFC, says 45% of all its borrowers have applied for loan moratorium. This behavior, however, is more distinctly noticed in the northern region of the country in places like Delhi-NCR.
Finway, a new-age fintech company for loans and financial investment, expresses concerns over the current loan repayment scenario in the country and the changing mindset of the borrowers.
“The borrowers’ mindset has changed quite significantly with regards to loan repayment as well as investments – especially since the RBI has announced a three-month extension of the moratorium on loans till 31 August 2020, it says.
According to its findings, most of borrowers that have opted for moratorium belong to the middle-age group, and they are either salaried individuals or business entrepreneurs. Depending upon the nature and scale of the lending institution, the outstanding loans that are coming under moratorium are ranging from 30% to 70%, it says.
Another worrying trend that Finway noticed is sharp fall in the demand of loans.
“The customers are being reluctant in taking loans or taking any risk in their business.The only thing in their minds right now is to pay the loans back as quickly as possible. They are cutting down the costs drastically, and all they are doing is re-structuring their loans. Most NBFCs are facing this situation,” it says.
It observed that customers are already facing a lot of problems due to pay cuts and layoffs right now, and the majority of them have agreed to not spend any money on the non-essential items for the next few months, till the situation gets a little better.
“There are cases now coming to us, where the customers just want a lower ROI; they don’t want any additional amount. Everybody is playing safe with regards to their borrowing and spending habits. They are unable to pay EMIs and are under tremendous pressure, but in no circumstances they are looking to raise more debt as they already feel the burden. On the contrary, they are liquidating their assets to become debt free,” said Mr. Rachit Chawla, Founder and CEO, Finway.
