Loan officer discusses terms with a borrower in a dimly lit office.
Indian lenders are preparing for a potential slowdown in loan collections during the summer months, mirroring a trend observed in previous years. According to a non-bank lender, who requested anonymity, collections typically dip by approximately two percentage points during the summer season. This is attributed to reduced field visits and a potential slowdown in business activity among borrowers.
The lender noted that some customers may seek deferments as business operations are affected by the heat. The expectation is that collection activity will normalize once temperatures decrease. This seasonal fluctuation highlights the challenges lenders face in maintaining consistent collection performance throughout the year.
The anticipated dip underscores the sensitivity of loan repayments to external factors like seasonal changes and economic activity. Lenders may need to adjust their collection strategies during these periods to mitigate the impact on their portfolios.
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