Amid the ongoing coronavirus crisis which has hit businesses across segments, Shriram City Union Finance Limited has significantly cut loans to its key set of customers. Compared with the year ago period, the loans to small businesses such as grain merchants have fallen 99 per cent to Rs 20 crore in the first quarter of the ongoing fiscal, Bloomberg reported. Businesses such as grain merchants constitute just more than half of the borrowers of the Non Banking Financial Company (NBFC).
The company is preferring to wait to get more clarity on the recovery of small businesses amid the ongoing pandemic, Chief Executive Officer (CEO) Yalamati Srinivasa Chakravarti told the global news agency. "Most of the businesses have not come back to their normal level of sales.I have to look at their cash flows much more closely than earlier," Chakravarti added. The bulk of loans applied by borrowers at the NBFC are of less than Rs 15 lakh each.
Shriram City was incorporated in 1986, and is a part of Shriram Group. Shriram City provides specialised services in retail & Micro Small & Medium Enterprise (MSME) lending.
Meanwhile, Prime Minister Narendra Modi recently held a meeting with top bankers and impressed upon them the need to push lending towards the productive sectors for revival of the economy hit by the COVID-19 pandemic. The three-hour long meeting, held via video-conferencing, was attended by CEOs of large public and private sector banks along with heads of NBFCs. The topics on agenda for the meeting included credit products and efficient models for delivery, financial empowerment through technology, prudential practices for stability and sustainability of the financial sector.