Ujjivan Small Finance Bank restructured about Rs 571 crore of loans up to July below Resolution Framework 2., as about Rs 750-800 crore of loans could call for restructuring in Q2, says MD & CEO Nitin Chugh. In an interview with Mithun Dasgupta, Chugh informs collection efficiency for each single state enhanced in July compared to June. However, Assam and Kerala are lagging behind. Excerpts:
In the initially quarter this fiscal, Ujjivan Small Finance Bank’s net interest earnings (NII) fell 16% year-on-year at Rs 384.40 crore. What are the motives behind that?
The NII was reduce simply because we had elevated levels of non-performing assets (NPAs) at 9.8% (gross NPA ratio). So, that book did not earn quite significantly. The all round book was more or significantly less at the exact same level, exactly where there was about 2% de-development. Thus, earnings earning on assets lowered.
What is the outlook for the NII for second quarter?
That is the difficult one to predict appropriate now. Our small business is enhancing and collections have also enhanced to 93% (in July, against 78% in June). We will be capable to really come out with it only when we finish the quarter. But items are enhancing, so that offers us self-confidence to at least think that Q2 will be far better than the Q1. Only caveat is that we do not get confronted with the third Covid wave. In Q1, we had worked below quite restricted circumstances on account of Covid second wave and lockdowns. In lockdowns, each collections and small business are impacted. And, then for our segment of shoppers, a lot of face-to-face interactions are expected. Thankfully, in the initially quarter, we got 15 days of April and 15 days of June to recover.
Disbursements in the Q1 was up by about 180% year-on-year, when quarter-on-quarter there was a 69% fall…
In Q1FY21, there was nothing at all at all, definitely no movement simply because of the prolonged sets of lockdowns. Last year, items had almost certainly opened up in June and July. In our small business, in microfinance segment, we largely deal with a lot of current shoppers. In Q1FY21, simply because we have been unable to move for just about the whole quarter due to restrictions, face-to-face interactions did not occur and we could not deal with these shoppers. There have been loan moratorium also. When men and women avail moratorium they do not want to take any new loans.
However, this time, because we got 15 days of April simply because of the continuing momentum from the Q4FY21, that sustained itself for sometime till the lockdowns came in location. And when the restrictions began to go away by June 15, then the momentum began to come back. Right now, demands for all types of loans have come back pretty strongly. Disbursements fell on quarter-on-quarter basis simply because Q4FY21 had been a quite excellent quarter for us.
Do you have loan exposure in Kerala? What is the collection efficiency for the state?
In Kerala, our loan portfolio is about Rs 214 crore, not a quite huge one. Kerala for us is not amongst the prime 5 states in any case. Our prime 5 states are Tamil Nadu, West Bengal, Karnataka, Maharashtra and Bihar. Every single state enhanced in July compared to June, Kerala has also enhanced. However, it is not comparable to some of the other states, it is lagging behind. At the finish of June, collection efficiency in Kerala stood at 39%, and in July, it was 86%.
In Assam, has the collection efficiency enhanced?
In Assam, the collection efficiency was 41% in June, when in July, it was 59%. So, Assam is nevertheless lagging. Most of the lenders are at the related type of numbers in the state.
Up to July, what was the total quantity of loans restructured below Resolution Framework 2.?
We have restructured about Rs 571 crore of loans. In July, we restructured about Rs 501 crore, out of whichRs 480 crore is from microfinance.