MUMBAI, Jan. 14 -- After a gruelling two quarters due to the coronavirus pandemic, India's non-banking financial companies (NBFC) may find some succour in the December quarter because of proactive provisioning by some. But investors should not let their guard down, yet.

Two big trends in the past three months have given confidence to investors on NBFCs. Improving collection efficiencies and a pick-up in loan disbursements for most lenders have brightened the outlook. Indeed, NBFCs have been able to get back their money from borrowers easier than before with collections efficiencies showing an increase every month.

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For most lenders, collection efficiencies are just a hair's breadt...