'Salary delays, biz downturns top reasons for loan defaults'

Salary delays are the biggest reason for loan defaults by individual borrowers, followed by business downturns, says a survey. The survey comes months after official data showed that unemployment is at a four-decade high, the pace of economic growth slipping to a six-year low, and banks increasingly rely on retail loans to expand books as corporate credit demand is a far cry.

"The current slowdown is affecting debt recovery across the country," Paytm-backed financial technology firm Creditmate said in a report on Monday. The report, based on the analysis of 2 lakh loans from 40 lenders RPT lenders, mostly NBFCs, across 30 states over the past six months, has found that salary delays are the major culprit for the delayed repayments in as much as 36 percent of the cases, followed by business downturns at 29 percent.

Job loss accounts for 12 percent of total defaults, while 13 percent are due to medical emergencies and 10 percent are due to migration. Interestingly, the survey also reveals that men are more likely to default than women, with 82 percent of non- payments being reported by men.

Also, while women are better at repaying, they are much better than men when it comes to paying the arrears at 11 percent faster than men. Among cities, Mumbai, Ahmedabad and Surat have the best payment rates, while Delhi, Bengaluru and Pune are among the worst of.

State-wise, Odisha, Chhattisgarh, Bihar and Gujarat are among the best states when it comes to honouring loan commitments, while MP, Haryana, Delhi-NCR and Tamil Nadu are at the bottom..

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)