As the world continues to grapple with the impact of the coronavirus pandemic, organisations face an uncertain future and the next few months are going to be crucial. For lenders, this is the time to re-evaluate and re-balance their portfolio. According to Meghna Suryakumar, Co-Founder and CEO, Crediwatch, companies that leverage tech-enabled platforms equipped with data analytics, artificial intelligence and machine learning are better positioned to tackle the economic crisis triggered by the pandemic and get ahead of their competitors.
Speaking to TNM, Meghna says that even established, well-capitalised businesses will need to devise a comprehensive strategy to manage cash flow, strengthen operations and maintain business continuity.
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In terms of GDP growth, Crediwatch projects that if the lockdown persists until May-end, the economy will experience a normal recovery quartering FY 20-21 at 0.9% to 1.02%.
Crediwatch is a ‘Data Insights-as-a-service’ company that provides lenders, businesses with actionable credit intelligence to increase their lending and trading activity.
Crediwatch expects a near-term impact on fresh loan disbursements of NBFCs (non-banking financial companies) post the lockdown. The microfinance sector is likely to be the worst-hit, buoyed by the economic uncertainties amidst the pandemic.
In fact, microfinance firms have already slowed down new loan disbursements in India’s hinterlands, and the scenario may take a while to improve. This is also because lenders are currently facing a challenge in collecting loans from borrowers with weak credit profiles, according to the company.
Meghna says that MSMEs will be impacted significantly as well with certain industries having more impact than others. “While the government has taken steps to improve credit flow to MSMEs (and may come up with a second stimulus package soon), we believe the on-ground implementation might be difficult to achieve given lenders have developed further trust deficit on small businesses, post the pandemic,” Meghna adds.
At a time such as this, especially with the pandemic enforcing the need for physical distancing and working from home, Meghna says that businesses have adopted digital tools to continue their operations and it has become imperative for companies across industries to embrace digital solutions to be able to operate efficiently.
“Even organisations that were earlier resistant to the idea of remote working, have now deployed video conferencing apps and team collaboration tools to allow their employees work from home during this pandemic. Telemedicine is another sector that has witnessed unprecedented growth following the viral outbreak and the subsequent lockdown. While these digital transformations were not planned from before, they will definitely pave the way for large-scale digitalisation across the Indian business landscape,” she adds.
Going beyond financial services, Crediwatch has studied the pandemic’s impact on different sectors and classified them into three categories: High, medium and low impact.
Automobile, tourism and aviation, real estate, manufacturing (capital goods), MSME, and metals and mining (steel / iron ore) fall under the first category. Financial institutions (banks and NBFCs), agrochemical, transport and logistics, textile and apparel, petrochemical, and metal and mining (coal) are categorised as medium-impact sectors. Finally, telecom, agriculture, logistics and warehousing, power generation, IT, manufacturing (FMCG) were declared as the least impacted sectors.