Bajaj Finance Limited, a non-banking financial company (NBFC), is set enter the credit card business by launching a co-branded credit card with Standard Chartered Bank. To start with, the NBFC would focus only on captive clients. It aims to issue 150,000-200,000 cards within 12 months of starting operations.
Initially, the company would offer only premium segments cards, Platinum and World, powered by Mastercard, and the risk would be managed by the bank. The company is expected to announce its foray in the credit card business in a week.
"More than 40 per cent of our customers in the consumer durables segment have credit cards. Hence, we want to tap the affluent customers with a low-cost acquisition model. The credit cards to be launched are expected to be premium, and these would focus on rewarding the customer for daily purchases made through the card," said a source.
Bajaj Finance has a loan book size of around Rs 9,000 crore, and its product line includes two-wheeler loans, personal loans, loans against property, small business loans, construction equipment loans and loans against securities.
"It is a good time to enter the segment, since banks have become very selective and cautious in the credit card business. Second, the card covers the core categories that contribute to over 30-50 per cent of the average individual spend, including grocery, utility bill payments, retail fashion, superstores and departmental stores. So, it is a good opportunity," the source added.
The company's total assets asset under management stood at Rs 7,571 crore as on March 31, and it disbursed Rs 9,435 crore during 2010-11. The NBFC added more than 500,000 customers during the first three months of the current financial year, during which it aims to disburse Rs 12,000 crore.