In December 2019, Venkatesan, 48, an autorickshaw driver in Chennai, took a three-wheeler loan from a public sector bank. He paid the first three instalments before his business came to a standstill in March 2020 after the lockdown to control COVID-19 began.
“I did not want to go to a financier so I opted for a bank loan, which I got with great difficulty. Since March 2020, business has not been so good and I skipped payment of monthly instalments,” he said. The situation turned a bit better at the start of this year, and “I managed to pay some money back but I’m stuck again with the second lockdown.”
Like Mr. Venkatesan, there are several autorickshaw drivers across Tamil Nadu who borrowed from banks to buy vehicles, but are unable to repay the loans. Data from various sources show the maximum outstanding loans are in the regions of Kancheepuram, Thiruvallur and Chennai. They are followed by Coimbatore and Salem.
According to the data from CRIF High Mark, a credit information company, outstanding loans in the three-wheeler segment in the State increased marginally to ₹5,973 crore at the end of March this year from ₹5,859 crore at the end of March 2020. Loans in default for 91-180 days stood at 6.89% as of March 2021, up from 5.47% in the same period last year. The non-performing assets in the three-wheeler category were the highest, compared with other categories such as car and two-wheeler loans.
With schools and colleges closed and people who otherwise commute working from home, autorickshaw drivers are getting very few rides after the pandemic started. Not just that, people are using their own vehicles for commuting. “A few autorickshaw drivers ventured into selling vegetables and tea through their vehicles; with the money thus earned, they managed to repay loans. Some drivers took to other jobs to repay the loans,” said Ramesh, who has been driving an autorickshaw in Chennai for over a decade. “But this formula does not work for everyone, so many have defaulted,” he said.
While banks are restructuring some loans, not all drivers are aware of the programme as they have not visited the banks for fear of being questioned.
A senior official of Indian Bank said non-performing assets had marginally gone up as the borrowers were affected by the economic impact of COVID-19. “Compared with the last financial year, there has been a drop in new sanctions [of loans] owing to the pandemic and the lockdown,” he said.
The bank is providing various Government of India-guaranteed credit lines, like the Emergency Credit Line Guarantee Scheme. The moratorium was extended in March 2020 to August 2020 as per the Reserve Bank of India’s guidelines.
Indian Overseas Bank said the demand for three-wheeler loans came down drastically after the lockdown started. It sanctioned ₹0.5 crore in 2020-21, as against ₹0.96 crore in the comparable period last year. Demand had not picked up because of the second wave of the contagion, the bank said. However, it said non-performing assets had not gone up in the segment. Both banks said they were restructuring the loans.
