The Reset
Time to hit reset and accept the new normal. Our series of in-depth stories and analysis on the changing dynamics of India’s tech landscape in a post-Covid19 world — from how industries and sectors are transforming to new opportunities, evolving consumer behaviour, the new rules of venture capital, M&A and more.
“There is a virtual standstill in lending in the consumer, personal loans, home loans and unsecured SME loans segments due to the pandemic. Only select corporate lending is active with grim visibility on demand and resumption of business.” — Manish Lunia, cofounder, FlexiLoans.
India’s banks, digital lenders and non-banking financial companies (NBFC) have braved events like demonetisation (2016) and GST (2017) and the ILF&S crisis (2018) with resilience. But a pandemic is unprecedented and the market is all gloom and doom at the moment.
In the lending and credit market, the fear of non-performing assets and loan defaults are an all-time high. Even leading organisations are facing a liquidity crunch after the Reserve Bank Of India announced a three-month moratorium on secured term loans.
Banks that work with NBFCs in times have also reeled in their credit lines, putting NBFCs in a bind once again. Digital lenders are being forced to reevaluate models, revisit customer profiles to change their approach. Online lending platforms have had to default to giving loans to only those with good credit history, something they have actively tried to move away from for so long. Plus, individual borrowers have seen their borrowing limit shrink with loss of jobs and pay cuts.
