The coronavirus pandemic has caught on in rural areas. The number of districts it is covering in rural areas is increasing. Ramesh Iyer, Vice Chairman and Managing Director of Mahindra and Mahindra Financial Services; Nitin Chugh, Managing Director and CEO, Ujjivan Small Finance Bank; and Anuj Sethi, Senior Director of CRISIL shared their views.

MMFSL’s Ramesh Iyer said, "I would think post-September, you will see a rural bounce back. There will be a spurt of demand coming back."

He believes that one has to live through this for a couple of months. "Once the pandemic comes into some control post-June and given another a month or two, sentiment should return to normal."

On repayment of loans, Iyer said, "If you split the cash flow between agriculture and infrastructure/economic activity cash flow, agricultural cash flow is pretty good, which is why now the collection efficiency is upwards of 50 percent. With the agri support being so good, any customer depending on the agri cash flow has been able to service his loan."

"The infected cases in rural have been steadily rising. With the limited infrastructure in terms of health and other activities in rural areas, and the rising infection, we definitely see rural sentiment have been impacted," said Sethi, Senior Director of CRISIL.

Rural headwinds will continue at least for the next couple of months, Sethi added.

He believed that agricultural income is likely to remain healthy this year because of the normal monsoon.

Customers are asking for more time to repay. “It does seem that this pain is going to stay for a little longer till the whole situation resolves itself,” said Chugh, Managing Director and CEO, Ujjivan Small Finance Bank.

For the entire conversation, watch the video

(Edited by : Priyanka Rathi)