Shriram Transport finance to drive into newer mkts

Plans to enter tractor and passenger vehicle financing.

Shriram Transport Finance Company (STFC), which finances pre-owned trucks, plans to enter the tractor and passenger vehicle financing across the country in the next few months. The company is also looking to tie up with 100 small and medium individual financiers in the next two years for loan generation.

The company has slowly begun testing the ground with financing tractors at Andhra Pradesh where it has introduced a credit line of Rs 5,000 per annum for a loan of Rs 1.5 lakh. The loans have been disbursed for those who want to purchase pre-owned tractors, a market, the company claims is worth Rs 10,000 crore.

"About 20 per cent of tractors are used for transportation in the business of agricultural commodities, bricks and others. With around 3.5 lakh tractors sold every year and our success with pre-owned tractors at Andhra Pradesh, we hope to emulate it across the country, " said Umesh Revankar, Executive Director, STFC.

STFC is also looking at passenger vehicle financing and has started offering finance in Kerala and Karnataka. The company plans to start passenger vehicle financing with buses which Revankar expects to be a Rs 500 crore revenue market in the next two years.

In the financial year 2006-07, the company had tied-up with 200 small and individual financiers in the south and west for around Rs 60-70 crore and expects to procure close to Rs 100 crore for the year 2007-08 through 100 financiers.

Recently, STFC had launched a co-branded credit card in association with the UTI Bank for small road transport operators. The card enables operators to withdraw cash from an ATM, buy fuel, tyres, oil and batteries. "Since its launch we have received 5,000 applications for credit card of which 2,000 have been dispatched. We hope to give out 100,000 credit cards by March 2008, " said Revankar.

The card has a credit limit of Rs 15,000 and is valid for two to five years. The company has also begun to market its pre-owned truck schemes aggressively and has roped in actor Dharmendra as its brand ambassador.