Cholamandalam Investment and Finance Company (Chola), the financial services arm of Murugappa Group, has said demand for its newly launched products has been good and it will scale up their reach over a period of time. In January, the company had launched three business divisions in the consumer and SME space and partnered with leading fintech companies.
The consumer & small enterprise loan (CSEL) has been launched in 50 locations and the company acquired over 1.3 lakh customers in Q4 of FY22. Both traditional and fintech partnerships have ensured business growth. The secured business & personal loan (SBPL) was also launched in 50 locations with an initial focus on the South and the West markets. The SME loan division has been servicing customers from 35 locations. Traditional and fintech partnerships are promoting its business growth as well.
Chola had reported a net profit of 690 crore for the fourth quarter of FY22 as against243 crore in the same quarter last fiscal year, registering 184% growth. The company’s total revenue went up 6% to 2,632 crore as against2,478 crore. Its aggregate disbursements in Q4FY22 were at 12,718 crore as against8,071 crore in Q4FY21, registering 58% growth. Out of it, the vehicle finance disbursements grew by 43% to 8,785 crore as compared to6,153 crore in Q4FY21.
President & CFO Arulselvan D told FE that there is quite a large demand for these products and the company will start scaling up their availability across the branches. “But some of the products are not suited for the rural customers, so 100% deployment of all the three products would not happen across all the branches,” he said. The company has 1,145 branches across 29 states and Union Territories, of which 80% are located in tier-III, -IV, -V and -VI towns.
Arulselvan said the heavy commercial vehicle segment is slowly picking up and there is revival in used vehicle demand as well. The heavy commercial vehicle segment registered 22% growth in Q4 FY22 on account of a low base in the previous year. Recovery in macroeconomic environment and improved freight availability will support growth in this segment, the company said in its investor presentation.
On the used vehicle vertical, Chola has seen good growth as the segment has contributed 33% of the company’s disbursement volumes and is expected to grow in the coming quarters as well. The company said it intends to maintain its focus on two-wheeler financing with a clear eye for credit underwriting to maintain portfolio performance. It has created a robust collection mechanism to overcome any pressure in the segment.