GE Money halts durables funding

GE Money India, a subsidiary of the world's largest non-banking finance company (NBFC) GE Capital Corporation, has stopped consumer durables financing.

Banking sources indicated that GE Money has withdrawn its sales force from leading retail chains such as Vijay Sales even as the NBFC is reorganising its core businesses.

When Business Standard called the NBFC's call centre, the customer service executive said, "We have stopped consumer durable financing. However, we will continue to service the existing customers." In May 2007, GE Money had exited two-wheeler financing business citing low margins.

"Our growth strategy is to consolidate our core businesses and focus on high growth, profitability businesses. We will continue to invest and grow our current portfolio consisting of mortgages, personal loans and credit cards that will help us achieve our aim to become one of the top five financial services company in India," said Vishal Pandit, president and chief executive officer, GE Money India.

A banking analyst said, "This is an asset-backed loan product for a tenure of 6-12 months. It's not very feasible for the lender to recover the loan in case of default. The resale value of the consumer durable is also difficult to recover. The market has also got competitive as manufacturers run promotional schemes with financial institutions and also large retailers are now running their own financial schemes through their own subsidiaries."

Pandit added, "Sales finance is a part of our overall portfolio. In order to further enable our future growth and consolidation, GE Money will be focusing on large retail outlets. Growth of large retail chains will drive future growth in sales finance." GE Money operates through 4,500 outlets across 60 locations in the country.