The nationwide lockdown was imposed in India on the 22nd of March. The effects of this complete lockdown will feel in the Indian Economy for some months even after the relaxation. The COVID-19 Pandemic and the lockdown that followed have paralyzed businesses and resulted in large-scale unemployment. Unemployment spiked to 23% in April says the Centre for Monitoring Indian Economy. This has impacted the Indian loan market. This will, in turn, affect the repayment ability of the borrowers and the demand for fresh loans. Let’s understand Covid 19 effects on the Indian Loan Market.
Banks will face one of the toughest years in terms of loan growth. Retail loans may take a longer time to bounce back due to the uncertainties around employment and pressure on wages. Many companies have announced pay cuts while some have announced layoffs to bring down costs. Indian banks introduced 5 emergency loans during this global pandemic.
The loans are for their corporate clients, MSMEs, SHGs, Retail borrowers & Pensioners.
IND- COVID Emergency Credit Line for Corporates (IBCECL)
Under IBECL, additional funding will provide up to 10% of the working capital limits. This loan is applicable to large corporates and medium enterprises. IBCECL will be applicable for a tenure of around 36 months with an initial moratorium of up to 6 months and an additional fixed interest rate of 1-year MCLR. Subsequently, all other charges will be waived.
IND- MSE COVID Emergency Loan for MSME (INDMSE-CEL)
The MSME sector in the Indian loan market is one of the most affected due to this global pandemic. Under this type of emergency loan, additional funding of 10% of FBWC limits with a maximum of Rs 50 lakhs will make available for all MSMEs for a tenure of 60 months. This loan will make sure that MSMEs loans are not derived from liquidity during these challenging and uncertain times.
SHG-COVID - SAHAYA LOAN for Self Help Groups
This situation is very challenging for self-help groups. To help self-help groups including women beneficiaries through this crisis each member will be eligible to avail of a soft loan of Rs 5000 which adds up to Rs 1 lakh per group. The tenure of the loan would be around 36 months with a 6-month moratorium.
IND-COVID Emergency Salary Loan for Retail borrowers
Due to the rapid spread of the coronavirus, many people are in need of money for medical and other emergency expenditures. Under this loan type, salaried employees will avail of a loan up to an amount equivalent to 20 times the latest monthly gross salary. This will be up to a maximum of Rs 2 lakh.
IND COVID- Emergency Pension Loan for Pensioners
The pensioners, which generally consist of the older population in the country are also getting affected by COVID-19. This virus is affecting the older population much more severely. Therefore, under this loan facility, 15 times monthly pension with a maximum of up to Rs 2 lakh will be allowed. 60 months of repayment with concessional interest will be given and other charges to be waived.
Why Terkar Capital?
During these uncertain times, We at Terkar Capital stand by our customers. We will help you to get various credit lines so that you can meet the immediate liquidity requirements of your business. Be it raising funds for the IT industry or MSMEs in the pharmaceutical sector, Our trained executives will assist you in the entire procedure when applying for loans in the Indian loan market.
We speed up the process so that they get the required funding as soon as possible. Even after the disbursement of the loan, if the client faces any issues, we are happy to help until the end of the tenure of the loan. Once you give Terkar Capital the responsibility, you don’t need to worry!