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MUMBAI : Despite the health crisis being far more acute during this second covid wave, borrowers have been much better able to meet obligations than last year, said Nira, a Bengaluru-based fintech lender.

Launched in mid-2018 by ex-Goldman Sachs colleagues Rohit Sen and Nupur Gupta, Nira focuses on providing small-ticket loans to blue- and grey-collar Indians through its mobile app and website.

In normal times, about 97% of payment dues get repaid within 30 days of the repayment date, it said, adding that collection rates still reached 95% during this second wave, displaying a very strong degree of resilience considering the scale of the crisis. This compares to a low point of 75% observed in the middle of the national lockdown last year, the lender said.

“There was more stress seen among borrowers in grey- and blue-collared jobs than among white-collared workers. Non-performing assets (NPA) rates were 1.1 times and 0.75 times of portfolio average respectively," it said.

Contrary to conventional wisdom, Nira said, borrowers in the lowest income bucket of 11,000-15,000 per month did not perform any worse than their higher earning counterparts. It said it saw the worst performance among borrowers earning more than 50,000 per month, mostly likely due to adverse selection, while there was an eagerness to build a good credit record in low-income segments.

“In recent weeks there have been some additional signs of stress as the lockdown takes its toll. Nira has seen an increasing proportion of already over-leveraged borrowers applying for loans and getting rejected," it said.

Rohit Sen, chief executive and co-founder of Nira said, the absence of a national lockdown was critical, and workers were much better able to have visibility of their future income streams this year than last.

“As states gradually open up and economic activity increases, credit performance will also normalize".

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