Small Value Borrowers Accounted For Half Of Covid Emergency Loan Scheme
ECLGS: Smallest borrowers had the highest share. Retail traders accounted for the largest number of borrowers under the scheme.
More than half of the borrowers who availed credit under the government's emergency credit-linked guarantee scheme till March 2021 were small value borrowers.
According to data released by TransUnion CIBIL, 58.5% borrowers had a loan exposure of less than Rs 10 lakh. Borrowers with exposures ranging between Rs 10 lakh and Rs 1 crore were about 31.7% of all borrowers who availed loans under ECLGS, the credit information company said.
The data pertains to borrowers who availed financing under ECLGS 1.0 and ECLGS 2.0, which was extended till March 2021. Loans worth Rs 1.7 lakh crore were disbursed under ECLGS 1.0 and ECLGS 2.0, according to TransUnion CIBIL.
While the smallest borrowers were the largest in number, a bigger share of eligible borrowers in the Rs 10 crore-Rs 25 crore loan bucket availed of the scheme. This suggests that medium-sized firms would find it easier to access credit.
Data from the credit bureau shows that 28.75% of eligible borrowers in the Rs 10 crore-Rs 25 crore bucket availed the scheme. In contrast, only 5.18% of those eligible among small borrowers availed of the scheme.
Among key sectors that availed credit under the scheme, traders accounted for the highest share at 39% by count. Among traders, 90% of those who availed credit were retail traders.
Services sector firms accounted for 35.8% of borrowers, with transport operators and other services making up the largest share within that segment.
Like most financial inclusion and government support schemes, public sector banks contributed more towards the ECLGS as well.
Public sector banks account for 46.8% of all the disbursals, followed by private banks at 28.5% and non-bank lenders at 16.4%. The average ticket size of loans extended by private banks was higher
Asset Quality
About 2% of the loans granted under ECLGS have turned non-performing as of March 2021.
About 10.04% of these ECLGS accounts have been tagged as special mention account. Special mention accounts constitute of loans which are overdue, however, not yet classified as NPA.
Under the scheme, borrowers were given a one-year moratorium on principal repayment. As such, a clearer picture of asset quality of these loans may take some time to emerge.
Sectors which contributed most to the NPAs are construction, fast moving consumer goods, hotels and restaurants, mining, logistics, machinery and transport, education, retail trade, leather and leather products, according to the report.
The report also assessed the availed rate, or the share of eligible borrowers who took credit under the scheme, by risk category.
According to this analysis, the availed rate was higher at 9.13% among high-risk customers, while for medium and low risk, the availed rate stood at 7.29% and 8.01% respectively.
High risk customers are those with a credit score of 300-680. Low and medium risk customers tend to have scores ranging between 771-900, TransUnion CIBIL said.