Non-bank lenders have witnessed a good rise in loan collection efficiencies in the September quarter after the reverses in the first three months of the fiscal, a Rating agency said on Tuesday. The build-up in provisions will help non-banking finance companies (NBFCs) against incremental uncertainties, ICRA said in a report, adding that such bodies are carrying about 50% higher provisions at 3.1% of the assets under management (AUM) as against 2% in the year-ago period. Most companies have reported collection efficiencies between 85-95% levels in September, as against 70% in August and 65% in July for nonbank finance companies.

For housing finance companies (HFCs), the same was 81% in August and 78% in July. "The improvements partly due to the closure of loan moratorium to borrowers because of the COVID-19 disruptions and given the fact that collections are typically higher in the last month of the quarter than during other months," Icra's sector head for financial sector ratings, A M Karthik, said. The six-month moratorium benefitted the borrowers, helped further by the improved cashflows.