Shriram City Union to focus on SME, bike loans
Liquidity not an issue for NBFCs: MD
Shriram City Union Finance Ltd. will focus on small and medium enterprises and two-wheeler disbursements to to grow its assets under management (AUM) by 12-15% during FY22, a top official said.
“Our loan book of SMEs used to be 55% of AUM, but it has come down to 49% in Q1 due to sporadic lockdowns,” said .S. Chakravarti, MD & CEO.
“We are trying to reach 55% in the coming months.”
Stating that SMEs were badly hit on account of the first and second waves, Mr. Chakravarthi said that they were not able to reach SMES on time to lend them a helping hand. “Currently, liquidity is not an issue with non-banking financial firms. Our first priority is to improve SME AUM book. For this, we have to reach out and work with them,” he said.
Out of the total portfolio of about ₹30,000 crore, SMEs accounted for 49%, two-wheelers 26%, gold loans 14.5%, personal loans 7% and auto loans 2% respectively.
The NBFC said to keep pace with the changing times, it would be focusing more on lending to electric vehicles in the coming months along with conventional vehicles.
“Everyone thought that personal mobility would gain more traction due to social distancing and ban on public transportation during the pandemic-led lockdowns. While the sales of four-wheelers picked up, it did not with two-wheelers,” he said.
Shriram City Union Finance has tied up with couple of original equipment manufacturers such as Okinawa, Ather Energy, Ampere and Hero Electric. It is in talks with Ola Electric.
Asserting that the average ticket size for e-vehicles would be in the band of ₹80,000 to ₹85,000 per vehicle, he said right now, the sale of e-vehicles is 8,000 to 10,000 units per month and it would pick up.
Mr. Chakravarthi said that their collection efficiency during April to June quarter was 93% with May being the worst due to lockdowns in certain States. “Things have started to improve during June as businesses were slowly opening. We are back on the track.”
According to him, disbursements in Q1 of FY22 was ₹4,560 crore against ₹6,570 crore in Q4 of FY21. The lender hopes to do ₹6,000 crore in Q2.
Queried about the next two quarters, Mr. Chakravarthi said he was keeping his fingers crossed due to the third wave in Maharashtra and Kerala and the impact it might have on their operations. The company operates in South, Maharashtra, Madhya Pradesh and Uttar Pradesh.
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