TIL Desk/Business/Lucknow/ Shriram Finance Limited (Shriram Finance), India’s largest retail NBFC announced today that the Company plans to double its loan book in 3 years in Uttar Pradesh, driven by a focus on MSME loans. The Assets Under Management (AUM) stand at INR 10,770 Cr (As of Sep-22) and the company plans to expand it to over INR 20,000 Cr in 3 years in UP. The growth strategy will be focused on growing the MSME loan book since UP has the largest number of MSMEs registered under Udyam and the opportunity to provide finance to MSMEs in the state is significant. The company also achieved tremendous success in financing 80,000 two-wheelers in Oct-Dec 2022 in Uttar Pradesh and the majority of their customers are self-employed. UP is the largest market for 2-wheeler sales compared to other states in 2022 and Shriram Finance has a leadership position in the state.
The growth has been on the back of an economic turnaround, rural markets revival and pick up in micro and small businesses activity. This has in turn driven up demand for financing of two-wheelers, commercial vehicles, and micro, small and medium enterprises (MSMEs). Shriram Finance caters to the diversified financial needs of over 6,60,000 customers through its 150 branches and over 5,000 employees in UP. The company has a large fixed deposit franchise in UP totalling over INR 2,400 Cr, with over 38,000 depositors. The growth strategy for the Company will be focused on driving the self-employed and the MSME economy.
Shriram Transport Finance Company, the largest financier of commercial vehicles, and Shriram City Union Finance, the largest two-wheeler financer and leader in micro, small and medium enterprise (MSME) lending, have recently been merged to form Shriram Finance Limited (Shriram Finance). Shriram Finance is a diversified player with a robust net worth of INR 37,500 Cr and Assets under Management (AUM) of INR 1,71,000 Cr, the Company caters to over 67 lakh customers across India (as of Sep-22).
Growth Strategy for UP: The company plans to double the AUM in the next 3 years through a focus on MSME lending and using a cluster-based funding approach for better-targeted lending to MSMEs. UP has the largest number of MSMEs registered under Udyam and the opportunity to provide finance to MSMEs in the state is significant. The company also plans to launch Gold loans in UP. The focus will be to increase penetration among the self-employed segment, specifically those who lack formal income proof and need capital to expand their small businesses. The company will use a targeted approach in each of the micro markets in UP, targeting micro and small enterprises in Agra for leather and shoe businesses, in Shahpur for wood carvings biz, Aligarh for locks and in Muradabad for brass-related business etc. UP has added the most number of companies in the post-pandemic phase driven by favourable policies and a supportive government. Thus the number of MSMEs to support the larger companies has increased in the state too and with that the need for finance.
Mr YS Chakravarti, MD & CEO, Shriram Finance commented, “80,000 Two-wheelers financed is a great milestone in a single quarter. Shriram Finance is the lender to the Aam Aadmi and our strategy is to focus on the self-employed and MSME segment in the 2 states. There is a large potential for UP with the number of companies rising and the state turning into an industrial hub. The business-friendly governance and improving law & order are leading to many new small businesses opening up. We specialise in understanding this segment and their credit needs.”
Mr GM Jilani, Jt MD, Shriram Finance speaking at the event said, “The 2 companies Shriram Transport & Shriram City have come together to form Shriram Finance and we have pooled together our strengths and will look at capitalising on each other’s potential in the next 1 year. UP is among Shriram Finance’s most important states and will continue to drive growth for the company. We have a leadership position in 2-wheelers and commercial vehicle financing and will now focus on growing the MSME lending business which will drive overall growth in UP.”
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