Rural economy data suggests that the unemployment rate is falling with increase in rural wages and farm loan waivers have made more cash available in the hands of farmers.
In an interview to CNBC-TV18, Ramesh Iyer, Vice Chairman & Managing Director, Mahindra & Mahindra Financial Services spoke about the latest happenings in his company and sector.
We do see sentiment pretty positive and now with monsoon expected to be more than average, definitely the rural sentiment is extremely positive. We are seeing it both in terms of loan growth as well as customers repaying their loans, he said.
Inventory levels are high at dealership in order to meet the festival demand and festive season should aid in loan growth, he added.
Non-performing assets (NPAs) do go up because of the customer cash flows not doing well. Post demonetisation, we have seen substantial improvement to asset quality, said Iyer.
Credit losses have not moved up due to collateral lending.
Sentiment both from the business side as well as from the collection side seems to be positive, he further said.
He expects to see some improvement in margins both from borrowing cost efficiency as well as from an overall efficiency.
For full interview, watch accompanying video...
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