Mahindra Finance To Hawk Risk Products

Mahindra & Mahindra Financial Services (Mahindra Finance), the auto-finance subsidiary of Mahindra & Mahindra, is planning to foray into vehicle and life insurance services in the current fiscal.

The company, which is doing a due diligence of the regulatory and organisational issues, may tie up with insurance companies for offering their products through its distribution network.

Ramesh Iyer, managing director, Mahindra Finance, said, "We are planning to start offering vehicle and life insurance products through our 134 branches across India, which covers almost 85 per cent of M&M's sales and service network."

"We have a customer base of over a lakh today and are adding about 27,000 customers every year. We are holding talks with a number of insurance companies at the moment," he said.

 

Mahindra Finance is also shifting focus to the east, which accounts for a chunk of M&M's utility vehicle sales.

The company is planning to add 20 more branches to its network, most of which will come up in the east.

The company, which has disbursed over Rs 1,200 crore of auto loans in the previous fiscal and registered profits of Rs 9.6 crore in 2000-01, is targeting a 20 per cent growth 2001-02.

V Ravi, chief financial officer, said, "Our non-performing assets are just 1.7 per cent, and we enjoy a AA+ rating on both our long-term and short-term commercial paper borrowings. We are hopful of further reducing our average cost of funds from 11 per cent."

Mahindra Finance, which privides finance to around 40-45 per cent of M&M's utility vehicles and 7-10 per cent of its tractors, also provides a "feedback mechanism" to parent M&M for improving relationship with its customers, Iyer said.