Money & Banking

Mahindra Finance forays into consumer durables, personal loan for existing borrowers

Our Bureau Mumbai | Updated on February 18, 2020

The company is also optimistic about the revival of auto sales by October

Mahindra and Mahindra Financial Services (Mahindra Finance) has entered the consumer durables and personal loan segment for its existing customers and is hopeful that the slowdown in the auto sales will begin to see a recovery by the festive season, around October.

“We are looking at consumer durables and small ticket loans to our existing consumers to start with,” said Ramesh Iyer, Vice Chairman and Managing Director, Mahindra Finance, adding that they are looking at consumers who have repaid 12 instalments regularly.

“We have invested in our digital and AI initiative. We have built two large teams. We believe that with a good AI engine we will be able to offer more products,” he told reporters

The offering was launched about three months ago and Mahindra Finance is hopeful that it would be gradually expanded to new borrowers as well.

Meanwhile, talking about vehicle finance, Iyer was optimistic that with patience, auto sales will improve over the next six months and pick up by the festive season.

“Consumer sentiments are turning positive with rabi crop, budget allocation to rural and agriculture will open up the rural markets,” he said. The company is hopeful that activity in infrastructure will also pick up with mining auctions and road construction. Further, the BS-IV and BS-VI transition will also be completed by April, he added.

However, recovery in sales of commercial vehicles could take more time and the sector may normalise by next year, he noted.

He also said that the company is now in a comfortable position after the liquidity troubles for the non-banking finance companies over the last 18 months.

“Both availability of funds and rates have come down. As a company with AAA rating and multiple sources of borrowing, liquidity was not a pressure point for us but cost was. We are in a comfortable position from where we speak now. Collections show an improvement, cash flow will improve.,” he said.

Published on February 18, 2020

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