- It has been observed from past instances that collections remained in line with the trajectory of improvement for most of the second half of FY22 as the impact of the second wave of the covid-19 pandemic reduced.
- The collections had seen a modest decline of about 3% following the third wave of infections in January 2022 but the recovery has happened again.
- Besides With business activities close to pre-Covid levels for most sectors coupled with a heavy focus on collections by the NBFCs and HFCs, the concern on collection efficiency.
- It is also been expected that collection efficiency is to remain largely stable this fiscal, as long as there is no fresh COVID wave that results in lockdowns by the governments.
- Apart from that, it has also been observed that the performance of secured asset classes, especially mortgage-backed loans, has been stronger than the unsecured asset classes during the COVID period.
- But the unsecured loan segment, such as microfinance loans, SME loans, or personal loans, had seen the sharpest decline in collections during the first and second COVID waves.
- According to the report, this trend will continue to remain strong for the entire first quarter of FY2023.
Question:
Q.1 According to ICRA, the collection efficiency of NBFCs and HFCs has been estimated in the range of _________for FY23?a. 100-101%
b. 98-100%
c. 97-101%
d. 90-100%
