Fullerton India Credit Company (FICC), a step-down subsidiary of Temasek Holdings, Singapore, expects to grow at 25-30 per cent over the next three years, Anand Natarajan, Head of Strategy and Business Execution, said.

The company’s loan portfolio is around ₹12,000 crore. Having grown at a good pace (at about 21 per cent CAGR) during the past three years when the economy was a bit sluggish, the company has good reason to be optimistic as the economy begins to gather momentum.

Lead indicators such as freight rates and sales of two-wheelers and commercial vehicles indicate that non-banking finance companies can look forward to some good times this year. “The credit climate is benign and rural sales are expected to be stable on the back of good monsoons, while retail consumption has also been robust,” Anand said.

FICC’s portfolio comprises loans against property, and personal, rural and commercial vehicle loans. The company intends to play only in the retail sphere, to stick to its knitting as it were, Anand said.

Strategy shifts

Along its growth path, there have been slight shifts in strategy. Broadly, given the need to balance risk and return, the company wants to keep its unsecured portfolio at 25-40 per cent of its book, Anand said.

Personal loans, which were the mainstay of its lending operations, have come down from a high of 61 per cent three years ago to about 35 per cent of the portfolio now. The NBFC is broad-basing its offerings and focussing more on commercial vehicle lending and home finance, its new foray.

Its housing portfolio has touched ₹100 crore in July, Anand said. The company had received ₹150-crore capital infusion during the last fiscal, he said.

Asked about the challenges in providing personal loans (which has generally not been a very happy experience for many other lenders), Anand said that a combination of analytics-based lending, heavy reliance on credit information bureau numbers as well as adequate risk controls has ensured that the portfolio quality has been satisfactory.

FICC’s business is also geographically well spread out, with 38 per cent of total business coming from the western region, 28 per cent from the North and 31 per cent from the South.

Anand said the company was going a bit slow on loan against property in view of supply problems in the real estate market while it has given a fillip to its commercial vehicles business. The new strategy in commercial vehicle lending involved focussing on fewer locations of about 30 towns rather than nearly 80 towns two years ago. He expects the CV portfolio, which currently is around 7 per cent of the book, to reach around 12 per cent over the next two-three years.

FICC has used the advantage of robust financial results to enhance provisioning against both unsecured and secured assets.

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