Loan disbursements slowdown to impact borrowers

Loan disbursements slowdown to impact borrowers
22/05/2019 , by , in News/Views

A continued slowdown in loan disbursements by housing finance company, owing to tight liquidity condition, could have a spillover impact on retail home loan borrowers and property developers, says a report.

Loan disbursement in the four quarters to September 2018 averaged ₹25,000 crore per month for large six Housing Finance Companies (HFCs).

Following September 2018, per month average disbursement fell to ₹13,500 crore, as few large HFCs faced serious challenges.

“HFCs have slowed down their loan disbursements, which can have a spillover impact on both retail home loan borrowers and property developers,” India Ratings and Researchs (Ind-Ra) said in a report.

It said tight funding in the housing finance industry has not only impacted fresh loan disbursement, but also loans where disbursements are linked to construction, thereby impacting a large number of home buyers, who could face challenges, to service their commitments to property developers.

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