Small companies may go bankrupt due to lockdown, NBFC companies and rating agencies warn


Lockdown can have the greatest impact on small companies. NBFC companies and rating agencies have warned of this. They say that if the lockdown goes on for a long time, then small and medium companies may face a credit crisis. & nbsp; These agencies say that during the lockdown last year, small and medium companies got additional funds ie credit line from the government. He also got the benefit of Moratorium. But this time no such feature has been announced yet.

NBFC’s Retail & nbsp; Loan & nbsp; Asset Quality & nbsp; Impact & nbsp;

Abra’s vice president and head (structured finance), ICRA, Abhishek Dafaria, says how much the impact of the growth of Kovid infection will have on the asset quality of retail loans cannot be said for sure but it needs to be kept cautious. Last year, due to the decline in loan collection, loans to many NBFC companies had moved towards the NPA category. This time the local lockdown is causing such a situation. & Nbsp;

Unemployment will increase if small companies are destroyed & nbsp;

NBFC companies say that if loans go into NPA category then recovery will be difficult. It will be difficult for the companies who are taking loans to return the money and they can get into trouble. Getting caught in the trouble of such small companies can & nbsp; shock on the employment front because small and medium companies give maximum employment in the country. If there are cases of more companies getting into debt, then RBE can restart the moratorium or & nbsp; or it can extend its duration. There have already been reports of increasing unemployment in urban areas due to the lockdown.

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