Fitch Ratings stated that the rising COVID cases may delay recovery in MSME and microfinance lending, and add to asset quality risks of non-banking financial institutions.
Fitch estimates India’s economic growth this fiscal ending March 2022 to be at 8.4 per cent but said that the deteriorating asset quality for Indian NBFIs in 2022 would stem primarily from MSME and MFI sectors.
Fitch further said that the surge in COVID-19 cases in India associated with the Omicron variant may delay the recovery in micro, small and medium enterprises (MSMEs) and microfinance lending.
Fitch expects that the scale of disruption associated with the wave will be modest by comparison with India’s initial lockdown in 2020 or the Delta variant wave of 2021.
(With inputs from PTI)
