In the LAP market, which the analysts have been flagging for potential risks recently, poor sentiment in the property market and the liquidity crunch faced by non-banking financial corporations weakened the performance of LAP, it said.
Delinquency indices for the LAP transactions rated by the agency have been on the rise and the 90-day overdue loans rising to 1.77 per cent in January from 1.05 per cent in the year-ago period.
High loan-to-value and high-yield buckets have reported higher delinquencies, it added.
In the case of commercial vehicle loans, the rating agency said its early delinquency index for rated CV loans fell to 7.53 per cent in January from 8.19 per cent in the year-ago period.
“The improvement in the performance of CV loans has mainly been on account of a moderate uptick in freight rates and changes in government norms such as revised axle load norms, which have led to adequate asset utilisation and, hence, regular cash flows for borrowers, thereby ensuring timely debt servicing,” it explained.
New vehicle loans have performed better than the used vehicle loans, it said, adding that the performance has improved across states.
Loans originated in Uttar Pradesh, Bihar and Jharkhand showed a relatively high delinquency levels, while Gujarat and Andhra Pradesh performed better, it added.
All the delinquency indicators for tractor loan transactions improved FY19, with loans made out in 2017 and 2018 performing better, it said.
In the case of micro-finance, capital infusion, desire to diversify into newer geographies and significant improvement and updates in underwriting standards resulted in an improvement, it said.