MSME and Housing Finance Witness Strong Demand from Tier III and IV Areas – Capri Global Capital
Capri Global Capital Ltd (CGCL), a diversified NBFC focusing on MSME lending and housing finance has seen an increase in credit lending in MSME and affordable housing sector, especially in Tier III and Tier IV cities. CGCL has also witnessed a surge in the loan disbursement in the August – September month which is now at par with FY19. With the credit off-take in semi-urban and rural area, CGCL is confident to achieve the target of 10%-12% growth in disbursements in the current fiscal year.
Speaking about the encouraging signs of upturn Mr. Rajesh Sharma, Managing Director of Capri Global Capital Ltd said, “We see early green shoots of revival, the ease of lockdown restriction creating demand for credit in the semi-urban and rural areas as well as improving collections. Last month we achieved a pre-COVID level of disbursement and we see activity level going up. We believe the NBFCs with a strong balance sheet and adequate liquidity would benefit in the long run. At Capri, we have adequate liquidity and got a lot of credit lines during the last four-month, utilizing the same towards prepayment of the loan and were able to negotiate better terms.”
“Other sectors like infrastructure finance, large ticket size lending and wholesale finance are bit under pressure” he added further.
In the last six months, CGCL has witnessed sizable improvement in collection efficiency both in the MSME and home loan segment. Among all the CGCL MSME and home loan borrowers, around 40% of the borrowers have been regularly paying the monthly EMIs for the past six months, whereas only around 6% of the customers were facing challenges to pay the EMIs consistently.
- CGCL is into secure lending for MSME and home loans and expects NPA to rise at most by 1% to 2%
- The Company’s MSME loan under moratorium 2.0 stood at 37% in comparison to 53% as under moratorium 1.0.
- Not much loan restructuring request has been received so far, thus, expecting minimal impact in next 2-4 month
- Increase in MSME activities in Tier-III and Tier-IV towns
- The Home loan moratorium rate stood at 27% under moratorium 2.0 in comparison to 33% as under moratorium 1.0
- Major demand for home loans are coming from within Tier III and IV towns as CGCL offers home loans to the affordable housing segment where the cost of the house is less than Rs 30-35 lakh
- CGCL is witnessing home loan requirement for self-construction plots as well as ready-to-move-in property
- The trend of increased demand is primarily because of realization to own a home as a result of COVID-19 as well as to take the advantage of reduced home loan interest rate which has significantly come down by 150 basis in the last six months