Bajaj FinanceBSE -5.40 %, which has been sticking to its existing customers when it comes to new line of lending, is now raising its risk profile by funding purchases of mobile phones and consumer durables to new customers, after other segments like furniture and loan against property slowed down.
The company has been able to take more risk as credit assessment has been made easier with rising identification through Jan Dhan bank accounts and Aadhaar. The consumer electronics market in India is Rs 80,000 crore per annum while the mobile phone and tablet market is around Rs 1,40,000-1,50,000 crore.
“It (company’s share of mobile phone lending) ought to be bigger than the size of the consumer electronics market,” said Rajeev Jain, MD Bajaj Finance. “People change their phones and tablets faster than they change their television. For the two different segments, the consumer behaviour is very different.” The company, which does Rs 1,551 crore of digital financing, has seen a 63% jump in this segment in the second quarter.
“We have taken four and a half years to crack this business segment (mobile product financing),” said Jain. “We are comfortable managing the credit risk of the mobile financing market. You would see it growing very healthy.”
Bajaj Finance has taken a cautious view on loan against property as the space got competitive. “We had a cautious view before demonetisation and post that, we raised our risk views on LAP,” said Jain. He says GST impact will take another two quarters to ebb.
Source: https://goo.gl/2SdpXe