Lending to mining sector stressed due to slow growth: NBFC official

The Kolkata-based NBFC is aiming for 20% growth in Gujarat market in the current financial year on back of car and tractor loans

Lending to mining sector is stressed because of the sector’s slow growth accentuated by factors like high risk, large exposure and small margins, resulting in diversification of loans to auto and other sectors, a senior official of Non Banking Financial Corporation (NBFC) Magma Fincorp Ltd said here on Friday. “Lending to mining sector has been stressed because of the sector’s slow growth accentuated by high risk, large exposure and small margins.

This has resulted in diversification of loans to auto and other sectors,” said, Sachin Khandelwal, Chief Sales Officer, Magma Fincorp Limited.  The Kolkata-based NBFC is aiming for 20 per cent growth in Gujarat market in the current financial year on back of car and tractor loans. “We will bank on car loans and tractor loans to drive our numbers in Gujarat this year. Our focus on auto loans which has been our mainstay in the state so far will also continue and we are confident our renewed focus on the rural and semi rural markets will come useful,” said Khandelwal. It disbursed Rs  443.60 crore across Gujarat in 2013-14.

He also informed said that Magma HDI General Insurance Company Ltd and Magma Housing Finance Company will achieve break-even in the current financial year.

Magma, which posted a net profit of Rs 45.77 crore in the first quarter of this financial year, reported 33% growth in disbursements to Rs 2398 crore in the said quarter.