The Hindu Business Line : Magma offers car loans at 2.99 pc interest

DURING this festive season, there is `good news' for all those who have been postponing buying a car for personal needs owing to `unaffordable' interest rates.

Magma Leasing Ltd (MLL), the Kolkata headquartered Rs 867-crore non banking financial institution, has launched its car loan product, christened `Magma Carisma', at an introductory interest rate as low as 2.99 per cent.

Announcing this at a press conference here on Thursday, the MLL Managing Director, Mr Sanjay Chamria, said the introductory interest rate would continue till Diwali. However, there is no limit on the number of cars to be financed.

"Magma believes in setting high standards in service and innovation in products and that's why the company is launching Magma Carisma to make car loan a `hassle-free and enjoyable experience' for the customers," Mr Chamria said.

Reasoning the strategy behind offering car loan at such low rate, he said the company worked out the product to penetrate aggressively into the Andhra Pradesh market, which was potentially big.

"We intend to make our presence felt in the market and would like to pass on maximum benefits to the end customers by way of offering more value and strong customer service. We have decided to aggressively pursue the new scheme in the State through direct promotions and dealer network."

Making it clear that the company was not at all mobilising any deposits for meeting funding needs, Mr Chamria said Magma has been raising funds through diverse options such as insurance companies, mutual funds and multilateral agencies.

During last fiscal company mobilised over Rs 1,100 crore through these channels to support the growing business needs.

Having been growing rapidly at a compounded annualised growth rate (CAGR) of 79 per cent in the last four years, Magma Leasing has set an ambitious target of achieving disbursal of Rs 1,352 crore of retail loans during the current fiscal, compared to Rs 867 crore in the previous fiscal. The company has already achieved a gross business of Rs 575-crore during the first half of this fiscal.

"We have also achieved zero non-performing assets (NPAs) ratio as at the end of June this year, thereby emerged as the first NBFC in the country to achieve such distinction," Mr Chamria said.

On the expansion plans for Andhra Pradesh, he said the company would set up another 14 new branches in semi urban and rural areas, taking the total branch network to 19 by the end of current fiscal. The company has set a target of recording a business of Rs 109 crore from this market.

"Apart from making our presence felt in the car loans, we will further strengthen our presence in the region in commercial vehicle and construction equipment loans segment," Mr Chamria said.

More Stories on : Consumer Finance | Cars | Andhra Pradesh

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