Kmpl To Offer Personal Loans To Clients

Kotak Mahindra Primus Ltd (KMPL), a joint venture between Kotak Mahindra Finance Ltd. (KMFL) and Ford Credit International Inc, US, today announced that it would lend personal loans to its existing customers from November 1, 2001. At present, KMPL is exclusively focusing on passenger vehicle finance.

Talking to mediapersons, Gaurang Shah, executive director, said, "We will continue to focus only on automobile finance as only our existing customers are eligible for personal loans." KMPL had planned to charge interest between 19 per cent and 21 per cent for personal loans against the industry spread between 21 per cent and 26 per cent, he said.

 

Despite the current sluggish trend in the automobile industry, Shah said that KMPL's disbursements during the current financial year would grow by 15-20 per cent to touch Rs 1,300 crore. During the fiscal ended March 2001, disbursals stood at Rs 1120 crore. The disbursements mentioned above include that of Ford Credit India, a joint venture between KMFL and Ford Credit.

To a query, he said the passenger car finance market- was expected to grow at 12 per cent per annum over the next five years mainly on account of growth in the automobile industry and increased finance penetration, that is, percentage of cars financed out of the total sales. From only 10 per cent in 1991, finance penetration had increased to 60 per cent and this was expected to grow every year by 3 per cent, he added.

Shah added that exclusive car finance companies such as KMPL would be able to increase their market share because of consolidation taking place in the industry. Currently, exclusive auto finance companies command only 20 per cent market share of all passenger vehicles financed.

KMPL, he said was looking at the used-car market more aggressively, adding that they had planned to increase its share in total disbursements to 20 per cent by December 2002 from 10 per cent.

"We might pro-actively involve ourselves to develop credible intermediaries to develop the second-hand car market," Shah said.