Citibank India will soon offer personal loans to students along with the International Finance Corporation (IFC) in India. The US-based bank will also offer personal loans to state government functionaries in Karnataka, Tamil Nadu, and Maharashtra.
Dinesh Sharma, business head, personal loans and sales finance, at Citibank said the bank had got approval from the Centre in January and it will, jointly with IFC, offer subsidised personal loans to students.
"We have about Rs 400 crore to disburse and will initially target students in premier management institutes and engineering colleges. The loans will be up to seven years," Sharma said.
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Citibank has a 25 per cent market share of the personal loans segment in the country and is hoping to grow at about 23 per cent this year in terms of disbursals. The personal loan segment is one of the fastest growing segments for all banks, and on an average about Rs 250 crore is disbursed every month by banks in the country.
Retail segment, accounts for just 10.5 per cent of all bank loans in India and there is tremendous scope for growth. According to statistics retail banking makes up just 2.2 per cent of the gross domestic product, which is much lower compared to other developing Asian economies such as Thailand (10.5 per cent) and Philippines ( 7.7 per cent).
The bank, according to Sharma, was looking at extending personal loans to state government employees of Karnataka, Tamil Nadu and Maharashtra.
"We are already offering personal loans to employees of public undertakings and the move to include state government employees will start in the next three to four months," he said.
Sharma, who is also the managing director of CitiFinancial Retail Services India Ltd, said the NBFC will expand to 35 cities by December 2002 and have a network of over 44 branches. The finance firms, at present, has 21 branches spread across 19 cities.
CitiFinancial will also be disbursing Rs 500 crore this year, a growth target of 100 per cent over the last year, Sharma said.
With NBFCs having no restrictions on the number of branches they can open, Citibank is using its NBFC presence to cross sell a number of retail banking products.
"One in every five CitiFinancial customer becomes a retail banking customer", Sharma says. Meanwhile, Citibank has received permission to open five more branches in India in 2002, which will take its total network to 20.