If buying and selling is shifting online then credit cannot be far behind. Bajaj Finance has for the first time in the country launched a mobile app to provide finance to customers. Rajeev Jain, MD, BFL, said that in two-three years’ time much of the buying will shift online and they have decided to be there with the launch of this service.
Around 12,000 application have already been received in the first five days since the launch and of that, the company has approved 9,000, Jain said. The consumer finance segment includes financing of two-wheelers, consumer durables, mobiles, personal loans, furniture loans and home loan to the salaried segment.
Consumer finance is a big chunk of Bajaj Finance’s portfolio accounting for 40% of the business. During the second quarter of FY16, the consumer finance segment accounted for Rs 15,691 crore and it grew at 42%.
The company will be watching how this app channel evolves and how the risk pans out. The app is linked to the Aadhaar platform, the credit bureau, fraud databases and application score card. It needs only four fields for approval, which is made in an instant and can be taken to any of the 12,000 retailers who connect to the Bajaj Finance database to complete the sale.
Bajaj Finance is planning a campaign to push its app. The company is hoping to reach a crore new customers.
Acquiring new customers, expanding into new geographies and finding newer ways to acquire customers is the way to deal with the current market conditions for the company, Jain said. “We cannot wait for the market to change and cyclicals to recover and those who wait are in for a long haul,” he said. For Bajaj Finance these will be growth drivers.
In the mobile phone category the company plays in the smartphone segment and finances phones over Rs 20,000.
During Q2 the company financed 1.60 lakh phones. The mobile finance business grew by 156%, furniture finance grew by 98%, personal loan by 59% and consumer durables by 42%.
Bajaj Finance reported a 37% in total income to Rs 1,701 crore and a 42% rise in PAT to Rs 279 crore during Q2FY16, which the company said was the highest ever quarterly profit. Jain attributed the success to the overall product portfolio with 17 lines of business with the balance sheet going up 36% to Rs 37,964 crore. Bajaj Finance saw its loan losses and provisions go up by 71% to Rs 137 crore.