Heatwave shaves 2% off loan collections in May
collections with many lenders registering a drop in their collection efficiency in May by between 50 and 200 basis points. One basis point is 0.01 percentage point.
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Besides heatwave, lenders blamed the elections and a fall in Rabi crop output for the fall in collections but expect them to bounce back when temperatures abate with the onset of the monsoon season.
«Yes, the severe heatwave across the country, along with a lower yield of the Rabi crop (due to a patchy monsoon last year) plus some restrictions related to movement of people during the elections, has led to a marginal impact on collection efficiency in the last few months,» said Manish Kothari, president and head — commercial banking at Kotak Mahindra Bank.
«However, with the continued government support on MSP (minimum support price), expectation of a normal monsoon this year, and added focus being brought in towards collections including added manpower, I would expect things to come back to normal during the course of the year,» he said.
«Last month saw the convergence of three rare events: elections, rains in one part of the country, and a heatwave across large parts of the country...these events collectively impaired both field and economic activity,» said Manish Jaiswal, managing director of Grihum Housing Finance, an affordable housing finance company. «Consequently, visit collection intensity had to be substantially increased,» he said. «While collection efficiency may
