Shriram City Finance targets $250 Mn car loan portfolio
Chennai: Non-banking finance company Shriram City Union Finance is targeting to increase its car loan portfolio to $250 million (10 billion) in an accelerated manner next fiscal year, said a top company official Monday. To achieve its goal, the company has signed an agreement with the country's largest car manufacturer Maruti Suzuki India. Announcing the deal, Subhasri Sriram, executive director Shriram City, said, "We have allocated 10 billion towards funding car purchases next fiscal." The Maruti Suzuki agreement would provide Shriram City healthy and voluminous leads from the car dealers. According to R.S. Kalsi, chief general manager (sales) Maruti Suzuki, "We are keen to expand our presence in rural and semi-urban markets. We have the right products and an excellent network across the country to support it. However, there is still a lot to do in direction of finance availability, especially beyond metro towns and hence the tie up." The tie-up would focus on financing of entry-level cars from Maruti - M800, Omni and Alto models. Initially, this arrangement will be available in Kerala, Karnataka, Tamil Nadu and Andhra Pradesh and subsequently will be extended countrywide. Speaking about Shriram City's targets for the coming fiscal, R. Parthasarathy, vice president (credit), said: "We are targeting a total business of 50 billion next year financing consumer durables, two wheelers, cars, personal loans and others." The company would close 2008 fiscal with a portfolio of 35 billion with a mix of consumer durable, two wheeler loans consisting 68 percent of total and the balance with personal loans. Looking forward he said the business mix would remain the same though the volumes would go up. "We expect loans to purchase Maruti Suzuki vehicles would constitute 60 percent of out car finance portfolio," Parthasarathy added.