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Rating agency  -- Crisil has said non-banking finance companies (NBFCs) are better placed currently on the liquidity front than they were a year ago, enabling them to service their near debt without much difficulty, despite a fall in collections because of the second wave of Covid-19. However, the pace of improvement in collection efficiency, the third of the wave of the pandemic, and access to funds need to be closely monitored.

It sated collections have once again been affected in the current fiscal by the second wave. The decline has been more pronounced in May (sequentially) because containment measures in most parts of the country kicked in only in the latter part of April. A gradual lifting of restrictions has resulted in an improvement in collections in June, but to a level still lower than March 2021.

Besides, an analysis by the rating agency indicated that under scenario-1, where it was assumed that collection in the next quarter would be 70 per cent of what it was in the past couple of quarters, almost 96 per cent of Crisil-rated NBFCs were found to have liquidity cover for three months of debt repayments. In the second scenario, where it was assumed that collection in the next quarter would be half of what it was in the past few quarters, it was found that almost 95 per cent of the NBFCs rated by the agency would have enough liquidity to cover three months of debt repayments.