The scope for financial inclusion in India is immense and the entry of Jio Financial Services in the non-banking finance companies (NBFC) space will not take away the market share of any entity, Bajaj Finserv chairman and MD Sanjiv Bajaj said on Monday.
The scope is so immense that India will likely need 10 more large entities such as Bajaj Finance and HDFC Bank going ahead, he said at an event organised by the industry lobby IMC.
Bajaj Finance is planning to enter the micro, SME, four-wheeler and tractor finance areas, apart from adding 1,000 more branches over the next two to three years, Bajaj said. “We started off as a two-wheeler financier to fund Bajaj Auto customers, then we moved on to consumer financing which was the most successful diversification, and then to loan against property. Now, we are planning to enter microfinance, SME finance as also tractor and four-wheeler financing. These expansions should happen over the next two to three years.”
The company It will expand its network from 4,000 cities and towns to more than 5,000 going ahead. “In 2018, Bajaj Finance was present in less than 20 cities and towns in UP (Uttar Pradesh) because law and order was a challenge. Nobody was taking loans from us, we were not comfortable issuing loans. The situation has changed…we are now in over 300 cities and towns in UP,” he said.
Bajaj Finance booked 79.94 million new loans during Q1FY24, up 34% over the last year. As of June end, Bajaj Finance’s assets under management stood at `2.70 trillion, up 32% on a yearly basis.
Bajaj shared the example of how the insurance industry, in terms of annual insurance premium, grew its total addressable market by nearly 50X from `20,000 crore in 2001. There are over 60 insurance service providers as against a select few operational in this field of business two decades ago, Bajaj said.
Bajaj said he won’t comment on the potential of Jio Financial Services’ growth as the latter is yet to detail its key products and other business details.