new delhi demonetisation appears to have hurt indias auto loan repayments badly as borrowers of such loans being the worsthit rating agency fitch said in a report small auto loan borrowers have been affected the most demonetisation is likely to have had a detrimental effect on the income and cash flows of commercial vehicle operators which could continue to feed through into repayments in the next few months it said in a report we do not expect ratings to be affected the collections as a percentage of investor payment obligations of fitchrated asset backed securities transactions dropped by an average of around 1 per cent in november 2016 the first month of demonetisation to 1015 per cent from 1025 per cent in october it said fitch has received december 2016 collection data for around 40 per cent of its rated transactions which points to a further average drop of 60 basis points borrowers were initially permitted to use demonetised notes for loan repayments which helped in managing collections in november it said however it said demonetisation has disrupted economic activity particularly in the informal sector and is likely to have hit borrowers incomes it is possible that collections will fall further in early 2017 and we believe it could take at least another 23 months for collections to return to normal it said the cash shortage has affected usedvehicle operators which generally have weaker credit profiles more than the newvehicle borrowers it said adding pools backed predominantly by usedvehicle loans saw an average drop in collections of 130 basis points in november 2016 those with a higher concentration of light and small commercial vehicles which again have relatively weaker borrower credit profiles compared to medium and heavy vehicle owners also dropped significantly by almost 200 basis points etauto published on jan 27 2017 at 0936 pm ist telegram facebook copy link be the first one to comment comment now comments comment now read comment 1 all comments post post find this comment offensive choose your reason below and click on the submit button this will alert our moderators to take actions reasons for reporting foul language defamatory inciting hatred against a certain community out of context spam others report join the community of 2m industry professionals subscribe to our newsletter to get latest insights analysis download etauto app get realtime updates save your favourite articles scan to download app auto loan fitch economic activity cash shortage demonetisation homenewsauto financeauto loan repayments facing problems courtesy demonetisation fitch