With competition getting tough, M&M Financial Services, a financer for automotive and tractors, is eyeing substantial business from the consumer credit segment through its digital platform.
The firm expects to disburse short-term credit of Rs 20,000 crore predominantly to its existing customers over three years through digital business unit. This will run as an independent unit within the company.
The company expects to build a strong balance sheet (in digital business unit) which will not just add to the growth of M&M Finance but also help to retain existing customers.
While the company does not see too much of competitive pressures, some players are trying to enter tractor and utility vehicle financing.
M&M Finance is also looking at alternative possibilities, hence set up its digital business unit, said Ramesh Iyer, vice-chairman and managing director of the company.
The firm has appointed Amit Raje as whole-time director designated as chief operating officer (digital finance business) from April 01, 2021.
According to Iyer, the company has a customer base of 2.5 million and adds 0.75-0.8 million customers each year. These in-house customers are available to start with.
The unit would give small-ticket loans — personal and consumer durable credit — to existing customers who have a good payment record for 12 months.
At present, many of them have been sourcing funds from families, trading communities, and money lenders.
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