Tight Payday Loan Companies Suspend New Fund Disbursements


Chennai: Lenders who offer employee loans have been stifled as new loan disbursements have been affected due to the ongoing liquidity crisis, late repayments and companies ordering pay cuts and layoffs.
Loanwalle.com, which provides short-term 30-day payday loans, said the liquidity crunch was severe because no bank or NBFC sanctioned new loans for subsequent loans.
Its founder, Sachin Mittal, said: “Our loan disbursement has seen a drastic drop from 10,000 requests in March to 2,000 in April 2020. The biggest challenge is for borrowers who think, the RBI announced a moratorium of three months, is applicable on these loans too. In addition, nearly 80% of loans disbursed in March are in default. ”
Others, including EarlySalary, which provides early payday loans to white-colored employees, said their loan disbursement increased from 160 crore rupees in February to 40 crore rupees in April 2020. Akshay Mehrotra, co- Founder and CEO of EarlySalary, said: “We have seen EMI late payments double in April. This is calculated on the number of customers who have repaid in the first week of a month without any notification by mail or message. We have recorded an EMI reimbursement worth Rs 80-Rs 90 crore so far. ”The average EarlySalary loan ticket size is 25,000 rupees at an interest rate of between 2 and 2.5% per month. With growing uncertainty and discussions over layoffs in travel-related industries, companies have also stopped admitting loan applications from new customers. “As of April 1, we have stopped the credit to new customers ts, travel and air transport industries due to the uncertainty in the air transport sector. We see an increase in new clients (almost 10%) from the salaried class segment in the third week of a month. Existing customers (80%) borrow at the start of the month because they know how to manage their cash flow, ”he added.
Speaking on the importance of clients’ credit histories, Prithvi Chandrasekhar, Head of Risk and Analysis at InCred, said: “Unlike the affluent segment whose credit scores are already available, blue workers will have reduced access to credit due to poor credit history documentation. . Since the lockdown was announced in March, we’ve stopped mounts, (i.e.) no new loan applications have been admitted for the consumer segment. »Personal loans to salaried employees for three to four years above Rs 2-Rs 3 lakh, above Rs 5 lakh for the affluent segment.
MoneyTap, which has employee borrowers representing 85% of the overall portfolio, has stopped new loans to new customers.
“We took a 30% to 40% hit on loan disbursements in April. Our clients who were inactive for two years are now applying for a loan. About 10 to 30% of employees have opted for a moratorium, while many believe that they are automatically covered by the moratorium regime. Thus, there is no new loan sanctioned for these voluntary defaults, ”said Anuj Kacker, COO and co-founder of MoneyTap.


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