L&T Finance, the financial services arm of the engineering giant Larsen & Toubro, on Tuesday said it is planning to extend its microfinance business to Gujarat and Orissa soon.

“In the microfinance sector, we have been working for over one-and-half-years now in four states — Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra — where we have over 5 lakh clients,” L&T Finance vice-president Dinanath Dubhashi, who was here to announce the launch of the company's non-convertible debentures, said.

“In a couple of months time we also plan to provide microfinance to the people of Gujarat and Orissa,” he added.

Dubhashi said the company had five branches in major cities of these state to operate from and approach the rural population to provide microfinance, mainly for income-generating activities.

“Our experience in the past 18 months has been very good and we have recovered almost 99 per cent of our loan amount from the four states where we are working,” he said.

Explaining their lending model, Dubhashi said while giving loans, the company makes the villagers form joint liability groups, consisting of four-five people. Such groups help as the liability of loan remittance lies on the entire group, he said.

L&T Finance’s Dubhashi said the company would be setting up meeting centres at block levels where the farmers or those seeking loans could come and apply.

He said the company is mainly involved in offering tractor loans under the microfinance scheme, besides giving loans for purchase of cattle and other income-generating works.