AIG weighs retail finance foray

American International Group (AIG) would launch consumer finance business in India in the next few months, rivalling other American entities "" GE Money and Citifinancial Consumer.

"AIG Capital India will enter the consumer finance business by the end of the year or early 2007. We are evaluating sequencing of product offerings in India. These would include personal loans, consumer durables financing, credit cards, auto loans, and home financing," said Sunil Mehta, country head and CEO, AIG India.

AIG Capital has received the Reserve Bank of India's (RBI) approval to set up a wholly owned non-banking finance company in India. The NBFC, AIG Capital India, will also launch asset management business.

"We are committed to building a robust asset management and consumer finance franchise in India. We believe that the Indian financial services sector offers strong growth potential which we are well poised to develop and grow," Mehta said.

GE Money, the financial services arm of General Electric, is on an expansion spree in in India, while Citifinancial is a well entrenched consumer finance arm of Citigroup in India.

For its asset managament franchise, AIG Capital is awaiting approval from the Securitites and Exchange Board of India.

"We are evaluating all options as allowed under the asset management business," said Mehta, when asked whether AIG would also launch venture funds and realty funds.

"This also opens up opportunity to look at other possibilities aligned to global business. We will look at asset reconstruction business, mortgage guarantee business and structured financial products in due course," said Mehta.

AIG Capital will be supported by the expertise in the parent company's AIG Financial Services and AIG Asset Management divisions.

AIG's Financial Services revenues stood at $10,525 million in 2005 and that from the asset management business was at $5,325 million.