Chola launches three new business divisions in Consumer and SME eco-system

19 Jan 2022 , 03:40 PM

Cholamandalam Investment & Finance Company Limited (Chola), the financial services arm of Murugappa Group, while consolidating its position as a leading player in the Vehicle Finance, Loan against Property, and Housing Finance businesses, launched the following three new business divisions in the Consumer and SME eco-system namely.

• Consumer & Small Enterprise Loan (CSEL)
• Secured Business & Personal Loan (SBPL)
• SME Loan (SME)

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 Rs3,50,000cr+ 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.

The company 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 not having adequate access to formal credit.

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 day-to-day operation and business improvements. These loans will create a positive impact in 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 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.

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.”