Hi, the intent is not to counter but just to give a perspective.
Its an unpredictable situation for sure. While the rural linked companies, mfi SROs like MFIN and Sa-Dhan and many market observers are of the opinion that rural hasnt been as much impacted as urban, and that rural will recover faster (will not go into the reasons for the same), however clearly the stock market believes otherwise looking at where mfi stocks are. Today, in the absence of hard data on collection rates or the impact of the lockdown on livelihood etc., these are views and opinions, and not analysis (not to say they are not important).
However specifically in Arman, it is a fact that they do not lend to migrant labourers or “outsiders”. Infact, one of the basic go-no-go criteria they have is that the borrower or spouse (whom they take as co applicant / guarantor) must own the house in which they are living in the location where they are availing the loan. Imagine, their borrowers are not even tenants, forget migrant labour. Another fact is that, if at all someone is migrating, it would be the husband (co applicant/guarantor) who would be going to other places to work for livelihood.
Ahmedabad and Baroda and many other large cities in various states are indeed in red zone. I am not aware of their % portfolio district wise, but one can guess that it wouldnt be non-material. (Now here is an opinion, because we havent yet seen action on this), however state govt. and district/municipality level officials are mapping hotspots in all the red/amber/green zones. So its likely that there could be some economic related activity even in red zone, but this remains to be seen.
Thank you.
Discl - long time and long term investor in Arman and have vested interests and would have the attendant biases, howmuchever I would like to deny that.