INTERVIEW| Demand for loans has come back, says Nitin Chugh, MD & CEO, Ujjivan SFB

Nitin Chugh, MD & CEO, Ujjivan SFB

Ujjivan Small Finance Bank restructured astir Rs 571 crore of loans up to July nether Resolution Framework 2.0, arsenic astir Rs 750-800 crore of loans mightiness necessitate restructuring successful Q2, says MD & CEO Nitin Chugh. In an interrogation with Mithun Dasgupta, Chugh informs postulation ratio for each azygous authorities improved successful July compared to June. However, Assam and Kerala are lagging behind. Excerpts:

In the archetypal 4th this fiscal, Ujjivan Small Finance Bank’s nett involvement income (NII) fell 16% year-on-year astatine Rs 384.40 crore. What are the reasons down that?

The NII was little due to the fact that we had elevated levels of non-performing assets (NPAs) astatine 9.8% (gross NPA ratio). So, that publication did not gain precise much. The wide publication was much oregon little astatine the aforesaid level, wherever determination was astir 2% de-growth. Thus, income earning connected assets reduced.

What is the outlook for the NII for 2nd quarter?

That is the hard 1 to foretell close now. Our concern is improving and collections person besides improved to 93% (in July, against 78% successful June). We volition beryllium capable to really travel retired with it lone erstwhile we decorativeness the quarter. But things are improving, truthful that gives america assurance to astatine slightest judge that Q2 volition beryllium amended than the Q1. Only caveat is that we don’t get confronted with the 3rd Covid wave. In Q1, we had worked nether precise restricted conditions connected relationship of Covid 2nd question and lockdowns. In lockdowns, some collections and concern are impacted. And, past for our conception of customers, a batch of face-to-face interactions are required. Thankfully, successful the archetypal quarter, we got 15 days of April and 15 days of June to recover.

Disbursements successful the Q1 was up by astir 180% year-on-year, portion quarter-on-quarter determination was a 69% fall…
In Q1FY21, determination was thing astatine all, perfectly nary question due to the fact that of the prolonged sets of lockdowns. Last year, things had astir apt opened up successful June and July. In our business, successful microfinance segment, we mostly woody with a batch of existing customers. In Q1FY21, due to the fact that we were incapable to determination for astir the full 4th owed to restrictions, face-to-face interactions did not hap and we could not woody with those customers. There were indebtedness moratorium also. When radical avail moratorium they don’t privation to instrumentality immoderate caller loans.

However, this time, since we got 15 days of April due to the fact that of the continuing momentum from the Q4FY21, that sustained itself for sometime till the lockdowns came successful place. And erstwhile the restrictions started to spell distant by June 15, past the momentum started to travel back. Right now, demands for each kinds of loans person travel backmost rather strongly. Disbursements fell connected quarter-on-quarter ground due to the fact that Q4FY21 had been a precise bully 4th for us.

Do you person indebtedness vulnerability successful Kerala? What is the postulation ratio for the state?

In Kerala, our indebtedness portfolio is astir Rs 214 crore, not a precise ample one. Kerala for america is not among the apical 5 states successful immoderate case. Our apical 5 states are Tamil Nadu, West Bengal, Karnataka, Maharashtra and Bihar. Every azygous authorities improved successful July compared to June, Kerala has besides improved. However, it is not comparable to immoderate of the different states, it is lagging behind. At the extremity of June, postulation ratio successful Kerala stood astatine 39%, and successful July, it was 86%.

In Assam, has the postulation ratio improved?
In Assam, the postulation ratio was 41% successful June, portion successful July, it was 59%. So, Assam is inactive lagging. Most of the lenders are astatine the akin benignant of numbers successful the state.

Up to July, what was the full magnitude of loans restructured nether Resolution Framework 2.0?

We person restructured astir Rs 571 crore of loans. In July, we restructured astir Rs 501 crore, retired of whichRs 480 crore is from microfinance.