Cholamandalam Investment and Finance Company (Chola), the financial services arm of over Rs 4,000-crore Murugappa Group, on Wednesday announced the launch of three new business divisions in the consumer and SME spaces, and partnered with leading fintech companies like BankBazaar, KreditBee and Paytail. The company is also in advanced discussions with many other fintechs and digital ecosystem partners for sourcing of personal& professional and micro & small business loans. It is expecting to go live with these partnerships over the next three to four months. The broader plan of Chola is to leverage its over 40 years of lending experience and 1100 plus branch network to grow each segment rapidly over the next few years.
Chola chairman Vellayan Subbiah said, “We are excited to launch three new business divisions in the consumer and SME ecosystem 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.”
While consolidating its position as a leading player in the vehicle finance, loan against property and housing finance businesses, Chola, with these alliances, intends to drive greater financial inclusion especially among customers who are economically active but not having adequate access to formal credit, said a release by the company.
The consumer & small enterprise loan (CSEL) division will focus on personal & professional and micro & small enterprise loans. The secured business & personal loan (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 operations and business improvements. These loans will create a positive impact on the lives of millions of informal micro-enterprise customers in India.
The SME loan division will focus on term-loan, working capital finance, equipment finance and supply chain finance through traditional and digital partnership channels.
Chola has recently entered into an agreement to make a strategic investment in the equity shares of Payswiff Technologies (Payswiff) of Rs 450 crore in one or more tranches. The investment will result in the company holding about 70% of the equity capital of Payswiff on a fully diluted basis, and Payswiff will become a subsidiary of Chola. Payswiff is a leading POS provider in India, enabling online payment gateway services for e-commerce businesses and providing e-commerce solutions with a total base of 3 lakh small- to mid-sized merchants like supermarkets and medical stores, among others.
Subbiah said this acquisition proposal is in line with the long-term strategy of the company to explore and expand in the entire lending ecosystem, particularly in the MSME segment. “Payswiff being a company forming part of the digital and technology ecosystem in the MSME segment is expected to add value to the existing Chola ecosystem. This investment will provide a platform to build new-age MSME offering at scale and access to the MSME network across the country,” he said.