Investec India had hosted the 5th Annual Insurance Conference on March 22 - 23, 2021. Swapna Bhandarkar spoke with Nidhesh Jain, Insurance Analyst on the key takeaways from the conference which focussed on the Life Insurance and General Insurance segments in India.

Everyone on the street is awaiting for the true picture to unravel post the deadline of moratorium on August 31. Swapna Bhandarkar spoke with Nidhesh Jain, NBFC Analyst, Investec India to share some insights from his latest report - SFBs and NBFCs: COVID credit costs seem manageable.

Amid the Covid shock, the bad loans are likely to mount to 12-15 per cent region. With the deadline for moratorium approaching, many rating agencies have issued red flags on how the financial institutions may suffer. To understand on what ails Indian banks and what the next few quarters will look like, Swapna Bhandarkar spoke with Sri Karthik, banking analyst for investec.

Nidhesh Jain, NBFC Analyst, Investec India hosted Sadaf Sayeed, CEO of Muthoot Microfin, the 6th largest MFI with a GLP of Rs49bn and active client base of 1.9mn as of Mar’20. The company has witnessed improvement in collections improving from ~18% in May to 50% in June. Rural is showing marginally better collections than urban. Interestingly, in Muthoot’s experience, customers on monthly collections have better behaviour than other customers. Mr. Sayeed expects structural changes in the collection process post COVID with ~50% of collections moving to digital over the medium term. He also expects the industry to move towards individual loans which, is a trend outside India. Muthoot is investing in technology to prepare for these changes.

Investec India hosted Mr Harsh Srivastava, CEO - MFIN, an Indian microfinance sector association. So far, most listed players have indicated as high as 50%+ collection efficiency in the first half of June’20. However, Mr Srivastava believes that this could still be limited to a few large players while most of the system might continue to struggle with collections of ~25% currently. This is expected to gradually improve to a 50-60% level by Sept’20 before fully normalizing by Dec’20. From a political risks perspective, between the two states of Bihar and West Bengal (WB) which are heading into elections, West Bengal seems more vulnerable but the industry seems to be banking on Bandhan to smoothen any unwanted events. Finally, liquidity flow to the sector remains the biggest risk which can force smaller MFIs to pursue aggressive collections which could lead to potential political risks.

Digital has become a big part of the IT services business over the last decade. However there are winds of change that could impact the way these spends are done. While the role of the CIO has been diminishing over the last many years with technology decisions being taken by other CXO’s, there is now a resurgence in the role of the CIO.
Nitin Padmanabhan, analyst, Investec India spoke with Rajan Kohli, President – Wipro Digital on how this change buying behaviour and how are digital spends likely to evolve.