The Hindu Business Line : `Magma ChamatCar' loan scheme at 2.87% flat

MAGMA Leasing Ltd, the city-based retail finance company, has launched "Magma ChamatCar", a special car loan scheme with a flat interest rate of 2.87 per cent.

On a reducing balance basis, the rate offered works out to 7.5 per cent. The scheme is being launched through a direct campaign initially in select cities, and will gradually be extended to all the cities where the company has a presence. The rate is being offered for all cars and all models, and the EMI for a 5-year tenure per lakh is put at Rs 1,913.

Addressing a news conference here, Mr V. Lakshmi Narasimhan, Country Head— Credit & Risk, Magma Leasing, said the rate being offered under the special scheme was substantially lower than rates offered by banks and financial institutions.

He said the repayment period will also be for a maximum period of seven years, and there would be no hidden cost, and of course no freebies either. The USP element is said to be the direct marketing, without any intermediaries, which would also ensure a better spread for the company.

Describing it as a "no-frills, transparent car loan scheme", he said the new scheme was expected to provide a major fillip to the company's efforts in achieving the ambitious business target of Rs 1,352 crore (disbursals) set for the current financial year. During 2003-04, the company disbursed retail loans of Rs 867 crore.

Stating that "Magma ChamatCar" will add substantially to the company's topline growth, he said the idea was to aggressively pursue the new scheme, for which separate direct marketing teams have been created. Car loans are expected to account for nearly Rs 500 crore out of this total business plan.

According to Mr Anindya Dhar, National Product Head (Car Financing), Magma, the special scheme will also be available with an exchange offer in Kolkata. All that interested customers need to do is to call up the nearest Magma office and the rest will be taken care of by Magma Direct Marketing team, he pointed out.

Magma has 54 offices spread across 13 States, and provides retail loans for commercial vehicles, passenger cars and construction equipment. In the first quarter of the current fiscal, it has already disbursed Rs 280 crore, registering a growth of 76 per cent with a profit of Rs 8.04 crore.

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