ICRA Report on Demonetisation impact on rated ABS pools

Dip in MSME, tractor and micro loan pool collections in November 2016, collections in other asset classes relatively stable

  • Micro Loan, MSME loan and Tractor loan pools witnessed a sharp decline in collections
  • Median monthly collections of micro loan pools declined to  91% from 99.8% till September 2016. Collections of some pools declined to 50%-70% levels. The 0+ dpd3 level in micro loan pools that was sub 0.5% until October 2016 spiked to 9% in November 2016
  • Collections in MSME loan pools also witnessed a sharp decline to 83% from 95% in the previous month. Here again, some pools saw collections declining to 40%-70% levels from 70%- 90% levels earlier. Though the average 0+ dpd level increased to 11% in November 2016 from 5.3% in October 2016, the increase in 30+ dpd level was very low
  • Median collections across tractor loan pools declined to 84% in November 2016 from around 95% in the previous month
  • Collections in LAP pools declined from 97% in October 2016 to 94.6% in November 2016. While the 0+ dpd level increased slightly, other delinquency buckets did not get impacted much. However, the monthly prepayment level declined to an average of 1.3% from a level of 2.1% seen till September 2016

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Impact of demonetisation on ICRA rated pools, Jan 05, 2017