Salary delays, business downturn — top reasons for EMI default

Surabhi Mumbai | Updated on December 09, 2019 Published on December 09, 2019

Representative image   -  REUTERS

CreditMate survey finds 54% defaulters were late payers and non-NPAs, while the rest were past deadline and NPAs

Amid concerns over a slowing economy, a new survey has revealed that salary delays and business downturns were the two main reasons for debt defaults this year.

The India Delinquency Report 2019 by digital debt collection platform CreditMate used data of over two lakh defaulting borrowers from across the country and found that delayed salaries (36 per cent) and business downturns (29 per cent) were the two main reasons for debt defaults.

Medical emergencies (13 per cent), loss of job (12 per cent) and being out of the city or country (10 per cent) were the other main reasons for default in payment of EMIs.

“The current economic slowdown is affecting debt recovery across the country,” CreditMate said in a statement on Monday.

The survey covered the May-November 2019 period.

“We have been operational for about eight months, but when we spoke to the defaulting borrowers for the reasons for late payment, delay in salary and problems in business were cited as the main reasons,” said Jonathan Bill, Co-founder and CEO, CreditMate.

About 54 per cent of the defaulters were late payers and non-NPAs, while the remaining 46 per cent were past the 90-day default period and were NPA accounts, Bill told Businessline.

The loans were taken by retail and small and medium enterprises, and the repayments ranged between ₹10 and ₹6 lakh.

CreditMate is a Paytm-backed fintech company and works with over 40 lenders, including banks and NBFCs.

The study also revealed that male borrowers were responsible for the maximum late payments at 82 per cent, while women borrowers accounted for 18 per cent of the defaults.

In terms of the geography of borrowers and debtors, Goa topped the States for the best payment rate, while Arunachal Pradesh, Haryana and Delhi were the worst performers. Vadodara, Mumbai and Patna were the top performers among the cities, while Ludhiana, Chennai and Bhopal were the worst in payments.

Published on December 09, 2019
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