Whalesbook
Indian lenders, including Non-Banking Financial Companies (NBFCs) and housing financiers, are experiencing a gradual increase in loan defaults within their secured portfolios, such as Loans Against Property (LAP). This stress is spilling over from the previously impacted unsecured microfinance sector, driven by overleveraged customers delaying repayments. Commentary from the September quarter earnings reveals rising delinquencies in small-ticket LAP, indicating pressure is spreading beyond microfinance into what was considered a stable asset class, a scenario previously flagged by the Reserve Bank of India.