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Micro lender Bandhan Bank Ltd’s September quarter metrics showed that small and vulnerable borrowers have been able to repay back their loans. That means that the unlocking of the economy since June has helped small borrowers get back on their financial feet.

The lender reported a 95% collection efficiency for the quarter for microfinance loans. Overall collection efficiency was 92% for the quarter. What’s more is that small business loans too showed a healthy trend of repayments. This augurs well for asset quality, as small businesses are the most vulnerable segment hit by the pandemic. In short, Bandhan Bank seems to be on track to reach pre-covid levels in terms of repayment track record. That said, the lender made additional provisions specifically towards covid-19 risks in the September quarter as well, taking the total amounts set aside to 2096 crore.

In terms of loan growth, the lender saw some improvement although pre-covid levels are yet to be reached in all segments. Advances growth stood at 14.2% for the bank and the micro finance book grew by 27%.

Given that the lender made provisions towards covid-19 risks in the September quarter as well, its net profit dropped over 5% year-on-year. That was less than what the street had anticipated. Investors seem to have taken note of the improved metrics as shares of the bank rose 4% on Monday.

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