Chennai-based Equitas Microfinance, which is among the largest microfinance companies in India, is diversifying into businesses like home finance and commercial vehicle finance. The target group for these businesses are people whose credit needs are not met by banks or NBFC but by the local moneylenders or pawnbrokers, company officials said. The home finance and commercial vehicle finance businesses would be separate subsidiaries of the group.

The home finance subsidiary, Equitas Home Finance, has disbursed close to Rs 2 crore worth loans so far, while the commercial vehicle finance subsidiary, Equitas Vehicle Finance has doled out Rs 30 crore worth loans, since the inception early this year.

“There aren’t many NBFCs that provide home loans of small ticket sizes for a 10-15 year period. Those are the segments that we target. The average ticket size of our home loans is about Rs 10,00,000,” says PN Vasudevan, founder and managing director, Equitas Microfinance, to FC.

In the commercial vehicle finance segment the company meets the needs of driver-turned-owners with an unproven credit record, whose credit needs otherwise would have been met by a moneylender or pawnbroker. The company provides credit for the purchase of second hand commercial vehicles with the average ticket size of the loans being about Rs 2.5 lakh.

Both the businesses would operate out of Equitas Microfinance branches. Equitas Home Finance is present only in Tamil Nadu, while Equitas Vehicle Finance offers services in states like Gujarat, Maharashtra and Rajasthan too.

At a time when credit is hard to come by from banks and financial institutions, many microfinance companies are looking at diversifying into related businesses to ensure a steady income and business stream.