The vacuum that was created due to the exit of large players from the two-wheeler financing segment is now being filled by new players and also by existing players beefing up operations, eyeing the window of opportunity.
At least one public sector bank and two foreign non-banking financial companies have chalked up plans to step up operations in the two-wheeler segment.
FamilyCredit, the retail lending wing of Societe Generale Consumer Finance, has increased its branch network to 48 from 18. The company that was formed by the acquisition of Appejay Finance in July 2007 has 90,000 customers since inception.
“FamilyCredit is extremely aggressive and we are perceived as one of the major players in the areas where we are present. However, priority is given to quality over quantity,” Parthanil Ghosh, country head of FamilyCredit, said.
ICICI Bank, Citi Financial, and GE Money are some of the players who have exited from the two-wheeler financing segment in the recent past.
ICICI Bank, however, has stopped financing two-wheelers from the dealers-end and does such financing from its branches only.
Fullerton India Credit, a non-banking finance company of Fullerton Holdings, Singapore, sees huge opportunity in two-wheeler financing.
Fullerton Financial Holdings is a wholly owned subsidiary of Temasek Holdings, the investment vehicle of the government of Singapore.
The company recently entered two-wheeler financing in a tie-up with Hero Honda Motors and plans more tie-ups with manufacturers, a spokesperson of the company said. Fullerton will have its own team at the showroom for better due diligence.
Fullerton is of the view they have entered the two-wheeler segment at the right time.
“In the mass market space, for our customers, two-wheelers are an important proposition. For us, it was a natural movement for doing secured loans in two- wheelers,” the spokesperson said.
Fullerton’s target customers are those who fall in the income bracket of Rs 5,000-20,000 a month (salaried) or between Rs 2,00,000 and Rs 2 crore (self-employed).
