Kmfl Plans To Fund Vehicles Operating Costs

Kotak Mahindra Finance Ltd (KMFL) plans to enter the business of financing operating costs of commercial vehicles -- cost of diesel, overhauling cost, and repairing and maintenance cost. The company also plans to start the business of funding premium of vehicle insurance as well.

The company has already entered into a two-year exclusive tie-up with the Apollo Tyres and is in talks with the oil companies to start diesel financing. Ajit Kumar, vice-president, KMFL said: "We are planning to provide value-added services to our commercial vehicle clients by making arrangements to finance their operating costs."

Kumar expects a great opportunity in financing the operating cost with the shift of technology. "With the improvement in technology, vehicle owners will move from road-side mechanics to authorised mechanics and then, it will be feasible for us to finance their needs. But before that we want to get into the diesel financing," he said.

 

In a shrinking market of commercial vehicle financing, KMFL is planning to increase the business by grabbing others' share, said Kumar. According to him, KMFL's market share among the non-banking finance companies in the commercial vehicle financing market has gone up from four per cent to eight per cent in the last two years. The company targets a 12.5 per cent share by the end of the current financial year.

In the first four months of this fiscal, the KMFL's commercial vehicle business has gone up by 70 per cent year-on-year against the target of 50 per cent for the full financial year. The business of the company grew by 33 per cent in 2000-01.

KMFL has added seven new branches to its network in the last financial year, taking the total number of branches to 21. The company, however, has no plans to add any more this year. "This year our modus operandi will be to expand the radius of our branches and target new areas," Kumar added.