Squeezed-out loan companies stop new fund disbursements
Chennai: Lenders offering loans to salaried employees have been strangled as new loan disbursements have been hit due to the ongoing liquidity crisis, late payment, and companies ordering wage cuts and layoffs.
Loanwalle.com, which provides 30-day short-term loans, said the liquidity crisis was severe as no bank or NBFC was sanctioning new loans for future loans.
Founder Sachin Mittal said: Our loan disbursement has seen a drastic drop from 10,000 applications in March to 2,000 in April 2020. The biggest challenge is that thinking borrowers, the RBI announced a three-month moratorium, is applicable. to these loans too. In addition, almost 80% of the loans disbursed in March have stopped paying ”.
Others, including EarlySalary, which provides advance salary loans to white employees, said their loan disbursement has decreased from Rs 160 crore in February to Rs 40 crore in April 2020. Akshay Mehrotra, co-founder and CEO from EarlySalary said: We have seen that the delayed EMI payment doubled in April. This is calculated based on the number of customers who paid in the first week of a month without any notification by mail or messages. We have recorded an EMI refund worth Rs 80-Rs 90 million rupees so far. ” The average size of the EarlySalary loan penalty is Rs 25,000 at an interest rate between 2% -2.5% per month. With mounting uncertainty and talks about layoffs in the travel-related industries, companies have also stopped accepting loan applications from new clients. “Since April 1, we have suspended credit to new customers, from the travel and airline industries due to uncertainty in the airline sector. We see an increase in new customers (almost 10%) in the salaried class segment in the third week of a month. Existing clients (80%) apply for loans at the beginning of the month, as they know how to manage their cash flow, he added.
Speaking about the importance of the client's credit history, Prithvi Chandrasekhar, chief risk and analyst, InCred said: “Unlike the wealthy segment whose credit scores are already available, blue workers will have access to reduced credit due to poor documentation of credit history. . Since the closure was announced in March, we have stopped originations, that is, no new loan applications were accepted for the consumer segment. Personal loans to salaried employees for three or four years above Rs 2-Rs 3 lakh, above Rs 5 lakh for the affluent segment.
MoneyTap, which has salaried borrowers representing 85% of the overall portfolio, has stopped new loans to new clients.
“In April, we received a 30% -40% hit on loan disbursements. Our clients who were inactive for two years are now applying for a loan. About 10% -30% of salaried employees have opted for a moratorium, while many believe they are automatically covered under the moratorium scheme. Therefore, there is no new sanctioned loan for those intentional defaulters, said Anuj Kacker, COO and co-founder of MoneyTap.