Cholamandalam Investment launches three new business verticals for consumer and SME eco-system

Cholamandalam Investment & Finance Company Limited (Chola), the financial services arm of Murugappa Group, today announced the launch of three new business divisions in the consumer and SME eco-system. The three divisions are Consumer & Small Enterprise Loan (CSEL); Secured Business & Personal Loan (SBPL) and SME Loan (SME).

The company has also entered in strategic partnership with 3 leading Fintech companies – BankBazaar, Kreditbee and Paytail. With these alliances, the company intends to drive greater financial inclusion especially among those customers who are economically active but do not have adequate access to formal credit.

- BankBazaar: It is a leading online marketplace for instant customized rate quotes on loans and credit cards. The partnership will enable pre-approved personal loans to salaried customers who are active on BankBazaar's platform. Chola and BankBazaar will leverage their advanced technology and digital capabilities to offer loans 100 per cent digitally.

- Kreditbee: It is one of the leading players in the digital lending segment in India, disbursing to over 5 million customers over the last few years. Chola has entered into a co-lending arrangement with them for funding loans to Salaried and Self-employed customers with a good repayment track record in Tier 1/2/3 markets.

- Paytail: It is a new age Fintech company focusing on offline 'Buy Now Pay Later' through brand partnerships. Through a funding partnership with Paytail, Chola has started providing check-out financing to customers with a good repayment track record in Tier II, III & IV markets who do not own a credit card.

Mr. Vellayan Subbiah, Chairman, Cholamandalam Investment & Finance Company Ltd said, "We are excited to launch three new business divisions in the Consumer and SME eco-system spaces. We have also partnered with leading Fintech companies – BankBazaar, Kreditbee and Paytail. All these brands come with a culture of innovation and excellence, and proven track records in their respective domains. We are confident that these initiatives and partnerships will go a long way in helping us towards making our products and services easily available to our potential customers. The company is also in advanced discussions with many more Fintechs & digital ecosystem partners for sourcing of personal loans, professional loans, Micro & Small business loans and BNPL. The company is expecting to go live with these partnerships over the next 3-4 months".

He further added, "The broader plan is to leverage our 40+ years of lending experience and 1100+ branch network to grow each segment rapidly over the next few years. We believe that these partnerships will help us in large scale customer acquisition and drive our next wave of growth."

Consumer & Small Enterprise Loan (CSEL)

CSEL will focus on the following new product segments through traditional, direct to customer and digital partnership channels:

- Personal & Professional Loans: It is one of the fastest-growing segments in India with INR 3,50,000cr+ originations. Despite this kind of growth, there are a lot of individuals who do not have access to credit in India. Given this backdrop, Chola is entering into the Personal Loan segment to provide these loans to salaried and self-employed professionals. The product range would include Term Loans, Flexi-loans etc. Chola will leverage advanced analytics-based underwriting using bureau and alternate data to underwrite these customers.

- Micro & Small Enterprise Loans: The MSME segment is significantly under-penetrated in India with more than 60 per cent of MSMEs not having access to formalized credit. Considering the importance and contribution of MSMEs to India's economy, Chola is introducing Small Enterprise Loans which will be offered to small businesses in the manufacturing, trading, and services segments. The product range would include Term Loans, Flexi-loans etc.

Secured Business & Personal Loan (SBPL)

The SBPL vertical will offer loans to self-employed non-professionals, through traditional channels. These loans will enable small businesses like traders and service providers to meet their funding requirements for the day-to-day operation and business improvements. These loans will create a positive impact on the lives of millions of informal micro-enterprise customers in India.

SME Loan

SME will focus on the following businesses through traditional and digital partnership channels

1) Term loan and working capital Finance

2) Equipment Finance

3) Supply Chain Finance

The lending landscape for MSME business in India is undergoing a paradigm shift with access to reliable data such as E-way bills, GST details etc. enabling robust underwriting of such customers. This has opened a large opportunity for players like Chola who have a physical presence across India to capitalise on this opportunity. Through the SME vertical, Chola, will focus on providing term loans, working capital finance, equipment finance and supply chain finance to SME customers.