Pickup in disbursements, improving collection efficiencies to help securitisation volumes: ICRA

ICRA | (Image: Wikipedia)

With business operations of lenders achieving near normalcy and improving investors’ confidence regarding the stability of cash flows coupled with improving vaccination coverage, securitisation volumes are expected to be higher in second half of FY2022, rating agency Icra said on 9 September.

 The collection efficiency in rating agency, ICRA-rated securitised pools originated by non-banking finance companies (NBFCs) and housing finance companies (HFCs) witnessed continued rebound in July, Icra said in a note.

This is on account of focused collection activities of the lenders and supported by gradual unlocking by states, the agency said.  Consequently, the incremental slippages in the softer and harder buckets have seen a decline, the agency said in a release.

Further, the focused collection efforts of the lending institutions and improvement in broader business activities in August 2021 are expected to continue to support the improvement in collections in future as well, Icra said.

While the Housing loans and Loan against property (LAP) remained the least impacted and were quick to recover to the March 2021 level, the monthly collections in commercial vehicle (CV) loans, SME and Microfinance loans also rebounded quickly to  above 90 per cent levels in July 2021 from the lows seen in May 2021, the agency said.

Resultantly, the incremental slippages have also reduced in June and July 2021 leading to submerging of asset quality concerns in the ICRA-rated pools, the agency said.