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Fedbank Financial Services (Fedfina), a subsidiary of Federal Bank, has set out a comprehensive expansion plan to scale up its balance sheet size by almost 10 times to ₹15,000 crore in the next five years.
“We will scale up our business by adding new products to our portfolio, extending our geographical presence, expanding our branch strength, and by increasing our workforce,” said Anil Kothuri, MD and CEO, Fedfina.
New products
As part of its expansion plan, the non-banking financial company (NBFC) will introduce two products: home loans and unsecured loans to its existing portfolio. Currently, its product line includes gold loans, loan against property, and wholesale finance.
“We have been focussing on gold loans and conventional loan against property, but now we have added home loans and unsecured lending up to ₹30 lakh focussing on underserved areas,” said Kothuri.
Fedfina currently has 140 branches across the five southern States of Tamil Nadu, Andhra Pradesh, Telangana, Kerala and Karnataka, and will expand its branch network to 500 by 2022.
“Through this expansion we will foray into western and central Indian markets and also deepen our presence in the south,” added Kothuri.
The company will also increase its workforce from the current strength of 800 employees to 3,000 by 2022, and has earmarked ₹100 crore for its expansion plans.
Kothuri said the NBFC also provides ‘small construction finance’ to local builders with a strong brand in the micro markets of southern and western India.
“We are also in talks with some public sector banks to originate loans for them on a 80-20 basis after the RBI’s recent circular on co-origination loans,” said Kothuri.
After the introduction of new products in April, the NBFC’s retail lending mix will be in the ratio of 20 per cent on gold loans, 35 per cent on loan against property, and 15 per cent each on home loans and unsecured loans, while wholesale lending will be retained at the current level of 15 per cent.
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