NBFC’s (Non-Banking Financial Companies) have begun to be more flexible in terms of their lending. Moratorium period, a small break, in which you will be exempted to pay your dues, did bring a lot of underlying issues to the front and somewhere the credit demand was also affected.
Since many of the borrowers had taken the moratorium period, it was a matter of concern for the lenders and credit card issuers. Since they were exempted for a period with permission, it was a tedious task for the lenders to evaluate the applicants.
With the end of the moratorium period, the repayment had begun, and the people started paying back their dues. This made it easy for the credit bureaus to provide information about the applicants to the banks and NBFCs.
It is estimated that with the upcoming festive season, there will be more demand for loans as the needs of the people increase. Due to the devastating effects, the pandemic had on the people, and it cannot be said that the demand will be the same as the previous year’s festive season. However, it can be said that the demand can come to the pre-COVID phase.
Things that have to be kept in mind while sanctioning the loan
Safety of the lenders
It has to be confirmed by the lenders that the applicants are trustworthy and capable, of the repayment. It is essential to assess the creditworthiness of the borrowers. The credit scores of the applicants were done without taking into consideration their non-payment during the moratorium period. What added to the uncertainty was the extension of the moratorium from 3- 6months. Due to the unavailability of the data, the lenders were very cautious in their proceedings.
Increase in demand
The increasing demands for the loans are almost said to be back on track. It was almost said to reach 95% of how it was in the corresponding year. There is also an increasing demand for two-wheeler loans. Another increase in the applications on credit cards, the festive seasons brings out many offers which the customers are eager to embrace upon.
The key focus of the lenders
The focus during the moratorium period was on the existing customers. However, situations have changed. They have started looking at new customers. They are now focusing on more staff to meet their needs. This lack of staff can be covered up by the new use of technology which has been recommended by the RBI. Technology has become a leveller to all the rising problems.