About Two-Thirds of Auto Loan Needs Met by Foreign Private Lenders: Report


Almost two-thirds of the auto industry’s loan needs are met by private and foreign lenders nationwide, according to a report released Tuesday.

Referring to data going back to June 2020, Crif High Mark, a credit reporting company, said government lenders lead in loan volumes, accounting for almost 35% of loans.

In terms of the value of loans granted, private sector lenders hold the largest share with 41.4%, foreign banks 24.4% and public lenders came third with 19.6%, according to the prepared report. by the company in association with said Sidbi.

The auto industry had faced challenges due to slumping economic growth and regulatory changes before the pandemic itself.

From an asset quality perspective, the ratio of non-performing assets (NPAs) to loans taken by the auto and auto components industry fell to 9.59% in June 2020, according to the report.

It can be noted that as of March 2020, the RBI had granted a six-month moratorium on loan repayments and allowed lenders not to recognize non-payments as NPAs. After the end of the suspension period, the Supreme Court ordered the freezing of the recognition of loans.

Of the total loans granted to the automotive and auto components sector, term loans represent 48%, followed by working capital loans at 33% and other credit facilities financed at 18%. he indicates.

As of June 2020, APRs for term loans stood at 14.7%, while the same for working capital loans stood at 5.2%, according to the report.

There were a total of 1.29 lakh of borrowers in the sector in June, he said, adding that in terms of the number of loans granted, 91% came from micro, small and medium enterprises.

Overall industry credit outstanding increased 1% in the June quarter to Rs 1.13 lakh crore, which represents 12% of sector turnover of Rs 9.4 lakh crore.

The 8 main automotive clusters together constitute 80% of the loan portfolio as of June 2020, he said.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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