According to a report from news agency Reuters, Mahindra & Mahindra Financial Services is gearing up to enhance its non-vehicle loans segment in the forthcoming fiscal year.
Ramesh Iyer, the company's vice chairman and managing director, expressed the goal of doubling this segment, which currently constitutes about 20 percent of its balance sheet.
"Our objective is to ensure that 20 percent of our balance sheet is attributed to non-vehicle business," stated Ramesh Iyer in an interview with Reuters.
This expansion's primary focus will be providing financial support to small and medium enterprises (SMEs), encompassing business loans, machinery financing, and loans against property.
Presently, non-vehicle finance accounts for approximately 5-6 percent of Mahindra Finance's loan portfolio. However, Iyer emphasized that they intend to gradually achieve this target, with projections of at most 10 percent by the fiscal year 2024-25.
Mahindra Finance, renowned for its vehicle loans, SME finance, personal loans, and housing finance services, anticipates significant growth in the pre-owned vehicle segment due to burgeoning demand and promising returns.
The company aims to bolster its assets under management by 25 percent year-on-year, aiming to reach Rs 1.25 trillion in the upcoming fiscal year.
Iyer also outlined expectations for an increase in net interest margins from 6.8 percent to around 7 percent by the end of March, with further increments to 7.2 percent by the conclusion of the subsequent fiscal year, contingent upon favorable actions from the Reserve Bank of India regarding lending rates.
In a new development, Mahindra Finance plans to explore international funding avenues for the first time in the upcoming fiscal year, whether through loans or bonds. This decision will hinge on factors such as the cost and availability of funds, alongside the prevailing liquidity conditions in India.
"It will depend on the overall cost of capital. We will assess the liquidity situation in India, the comprehensive cost of funding, and the tenure for which such funds are accessible," remarked Iyer.
Furthermore, the company is poised to broaden its partnerships, aiming to forge collaborations with two additional banks for co-lending. Additionally, it plans to extend its footprint by establishing 125 new branches in the next fiscal year.
