Report, Auto News, ET Auto
Mumbai: nearly two-thirds of automobile industryThe institute’s loan requirements are being met by private and foreign lenders nationwide, a report said on Tuesday. Referring to data going back to June 2020, Crif High Mark, a credit reporting company, said government lenders lead in loan volumes, accounting for almost 35% of loans.
In terms of the value of loans granted, private sector lenders hold the largest share with 41.4%, foreign banks represent 24.4% and public lenders come third with 19.6%, according to the report prepared by the company in association with Sidbi.
The auto industry had faced challenges due to slumping economic growth and regulatory changes before the pandemic itself.
From an asset quality perspective, non-performing assets (PostcodeThe ratio of loans taken by the auto and auto components industry fell to 9.59% in June 2020, according to the report.
It can be noted that as of March 2020, the RBI had granted a six-month moratorium on loan repayments and allowed lenders not to recognize non-payments as NPAs. After the end of the relief period, the Supreme Court ordered a freeze on loan recognition.
Of the total credit available to the automotive and automotive components sector, term loans represent 48%, followed by capital loans at 33% and other credit facilities funded at 18%, he said.
In June 2020, APRs for term loans stood at 14.7%, while the same was true for working capital loans at 5.2%, according to the report.
There were a total of 1.29 lakh of borrowers in the sector in June, he said, adding that in terms of the number of loans granted, 91% were from micro, small and medium enterprises.
Overall industry credit outstanding increased by 1% in the June quarter to reach Rs 1.13 lakh crore, representing 12% of sector turnover of Rs 9.4 lakh crore .
The 8 main automotive clusters together constitute 80% of the credit portfolio as of June 2020, he said.