Magma Fincorp looks to offer new products for rural clients

Tags: Banking
Magma Fincorp, the asset finance non-banking finance company (NBFC), is looking at introducing three to four newer products under the rural segment to reach consumers needs beyond tractor loans. With the tractor loan industry not expecting more than a flat growth this year, the foray would help the company tap better growth avenues going forward.

“We are working on various products that would complete the agri-credit portfolio. These include refinance, working capital, implements finance and crop loans. Right now, we only offer tractor loans, which may stagnate after 10 years and we hope that by the end of next fiscal, these products would be added to our kitty,” said Dhrubashish Bhattacharya, vice-president and head of national sales, tractor finance, Magma Fincorp.

These loan products would typically vary between Rs 1 lakh to Rs 2 lakh and would sum up to 7-8 per cent of the vertical’s turnover in the initial year.

“The agri input costs have been going upwards coupled with a low sentiment in some parts of the country like Gujarat, Maharashtra and southern states because of power crisis. Infact, the industry had witnessed a 2 per cent degrowth in December last year. However, we would still expect a 60 per cent growth in the tractor loans business this financial year, which may go down to 40 per cent in the next financial year,” he said.

In FY12, the tractor vertical had fetched sales of Rs 813 crore, contributing 11 per cent to the group’s total sales. “With most of the geography expansion met already, we would now focus on increasing our market share. This year it stands at 8 per cent and may go up to 10 per cent,” Bhattacharya said.

trushnaudgirkar@mydigitalfc.com

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