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Abhrajit Gangopadhyay

Bangalore , Dec. 23

CRASHING prices of desktops as well as notebooks and the increasing breadth of the grey market have forced several financiers to exit the business of funding new computers.

Players such as GE Countrywide, Citicorp, and ICICI Bank have stopped financing computers and notebooks in the recent past, leaving Bajaj Auto Finance as the sole player in this field, dealers said.

According to industry sources, most of these financial institutions exited the business as prices steadily headed south and multinational brands also brought down the entry-level pricing for notebooks.

"Such small-ticket deals were perhaps not viable for these large players."

A GE Countrywide official said: "We have stopped financing computers for now... but later we may look at it again."

Moreover, most of the players like Citicorp and GE Countrywide operate through direct sales agents (DSAs).

Finance sources said that the DSAs were perhaps not being provided with "enough incentive" to pursue this business.

The exit of big players has left the field open to Bajaj, which aims to garner a significant portion of the market.

"We expect to finance close to Rs 150-200 crore worth of computers in 2004-05," said Mr C.S. Ravindran, President, Bajaj Auto Finance.

The company targets only the home segment on retail computer lending.

"We started this business only two years ago and this year we expect to finance close to Rs 100 crore worth of computers," he added.

"We see lot of growth potential in the home personal computers segment."

Close to 60 per cent of the home segment buys assembled computers, which do not come under any finance umbrella.

Though branded computers makers are constantly lowering the prices to narrow the difference between assembled and branded computers and lure more customers, the marketing reach remains a challenge, according to the dealers.

In a bid to expand the addressable notebook market, MNC vendors have cut down the entry-level prices, which has met with considerable success.

With this exercise, the price gap between branded PCs and notebooks has shrunk.

Acer India was the first to launch the sub-Rs 50,000 notebook about three months back, and other vendors such as HP, IBM and Wipro have followed suit in shrinking the entry-level prices for notebooks.

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