Murugappa Group’s Cholamandalam Investment and Finance Company has created three new business divisions to drive the next wave of growth – Consumer & Small Enterprise Loan (CSEL), Secured Business & Personal Loan (SBPL) and SME Loan (SME).

“While consolidating the company’s position as a leading player in the vehicle finance, loan against property, and housing finance businesses, the company has also launched these three new business divisions,” said a company statement.

CSEL business will focus on threeareas – personal & professional loans (PPL), micro & small enterprise loans and strategic digital partnerships.

“We are excited to launch three new business divisions in the consumer and SME ecosystem spaces. We have also partnered with leading fintech companies. We are confident that these initiatives and partnerships will go a long way in helping us towards making our products and services easily available to our potential customers,” said Vellayan Subbiah, Chairman, Cholamandalam Investment & Finance Company Ltd.

Fastest growing segments

The company sees PPL as of the fastest-growing segments in India with ₹3,50,000+ crore originations. Despite this kind of growth, there are a lot of individuals who do not have access to credit in India.

Given this backdrop, Cholamandalam is entering into the personal loan segment to provide loans to salaried and self-employed professionals. The product range would include term loans, flexi-loans etc.

Cholamandalam is of the view that still about 60 per cent of MSMEs don’t have access to formalised credit. It is introducing Small Enterprise Loans to small businesses in the manufacturing, trading, and services segments.

Cholamandalam has also entered into a strategic partnership with fintech companies such as BankBazaar, Kreditbee and Paytail. “With these alliances, the company intends to drive greater financial inclusion especially among those customers who are economically active but not having adequate access to formal credit,” it said.

Helping small businesses

Under SBPL, the company will offer loans to self-employed non-professionals, through traditional channels. These loans will enable small businesses like traders and service providers to meet their funding requirements for the day-to-day operation and business improvements.

The third vertical SME will focus on offering term loans and working capital finance, equipment finance and supply chain finance.

“The lending landscape for MSME business in India is undergoing a paradigm shift with access to reliable data such as E-way bills, GST details etc. enabling robust underwriting of such customers. This has opened a large opportunity for players like Chola who have physical presence across India to capitalise on this opportunity,” it said.

Cholamandalam is also in advanced discussions with many more fintechs and digital ecosystem partners for sourcing personal loans, professional loans, micro & small business loans and BNPL. The company is expecting to go live with these partnerships over the next 3-4 months.

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