Cholamandalam Investment and Finance Co. Ltd. (Chola) is planning to scale up businesses of three new segments and improve the efficiency of existing segments, said chairman Vellayan Subbiah.
“The company’s strong sales and collections set-up combined with digital initiatives and branch reach will also support in improving efficiencies,” he said in the latest annual report.
According to him, in FY24, the disbursement growth in the consumer loan space is expected to be in the range of 15-20%, with non-banking financial companies (NBFCs) increasing their market share by 100 basis points.
“This growth will be aided by an increase in Tier-II financing, small ticket loans, and focus on young borrowers, where NBFCs have sharper focus,” he said.
During November 2021, Chola floated three new loan units – small and medium enterprise loans (SME), consumer and small enterprise loan (CSEL) and secured business and personal loan (SBPL).
In FY23, these units collectively disbursed ₹13,704 crore, while existing business segments such as vehicle finance, loan against property, and home loan (HL) disbursements grew by 87% to ₹52,828 crore. The business assets under management (AUM) of the company stood at ₹1,06,498 crore.
As of March 2023, CSEL served more than five lakh customers with an AUM of ₹5,527 crore. SBPL has more than 10,000 customers with an AUM of ₹444 crore. It has strong presence in tier II, III, IV & V cities, penetrated across all zones and operates across 10 States.
The SME division’s target-customers are the small and medium group segment customers. This division will continue to focus on equipment finance, term loans and supply chain finance and also unveil new product lines in the form of health care financing, lease rental discounting, leasing finance, factoring and solar financing.
In the post-pandemic environment, businesses are actively embracing digital solutions to improve processes and enhance customer experience. Chola is no exception to it and is implementing major digital initiatives across products and different lines of business, the financial services arm of Murugappa group said.
Chola’s vision is to establish a digitally-ready, automation-first, and data-driven technology capability with robust cyber security controls.
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