The days of zero interest on consumer loans are back. Big companies in consumer

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durabales, such as LG, Samsung, Videocon and Godrej, have tied up with non-banking finance companies to offer easy loans, in some instances even at zero interest, to consumers. The idea is to get their products out of the showrooms and into customers’ homes fast.

In most cases, the companies share the interest burden, paying the financiers part of the interest. The interest “subsidy” — that’s what it is from the consumer point of view — borne by the companies is as much as 5 per cent.

The new round of easy loans has seen two finance companies, Bajaj Finance and Shriram Finance, corner market share, say industry officials.

Financiers that were earlier big in consumer loans, like GE Money, CitiFinancial and ICICI Bank, have more or less vacated the market.

The State Bank of India continues to offer consumer loans, but on a limited scale, they say.

Amit Gupta, Videocon vice-president for sales, told Financial Chronicle that about 10 per cent of the company’s sales rode on easy consumer loans. “We have schemes with tenures ranging from 11 to 18 months for buying refrigerators and colour TV sets,” he said.