Magma Fincorp Ltd., bulk of whose seven lakh customers are in small towns and rural areas without access to the banking system, sees considerable synergies to be achieved between many of its existing lines of activities and the forays made recently in general insurance and housing finance space.
The general insurance products were expected to be a default choice for those seeking car, utility vehicles, construction equipment and tractor finance from the Kolkata-based non-banking finance company (NBFC) that has branches in 20 States and a Union Territory. “It would be part of the package we offer them,” according to Dhrubashish Bhattacharya, Vice-President, Magma Fincorp. When the policies came up for renewal, they were expected to translate into new business, he told press persons here on Monday.
The company also hopes customers in Tier-II and Tier-III cities to be major demand drivers for its home loans. “Our focus will be on affordable housing… loan less than Rs.20 lakh,” he said. The team was in place for the home loan business and the company was “waiting for final approval of National Housing Bank.” The NBFC had last month announced its decision to acquire GE Money Housing Finance and the entire home equity loans portfolio of GE Money Financial Services Pvt. Ltd., in a Rs.1,600-crore deal.
Mr. Bhattacharya said many Magma Fincorp customers, especially those in semi-urban and rural areas, did not have bank accounts and PAN (permanent account number) cards. As they could not produce many of the documents sought by banks and the interest charged by private financiers were high, they relied on NBFCs like Magma. The company extended loans on their satisfying its know your customer norms. The strength of the NBFC, which has Rs.14,650 crore assets under management, lay in its vast marketing and strong collection team network.
The NBFC, he added, was targeting to increase its retail loan disbursements in Tamil Nadu by 40 per cent. Last year, it had disbursed Rs.246 crore in the State.
