In a bid to widen its reach, Godrej Capital (GCL) will start offering business loans without any collateral to small and medium enterprises (SMEs) across the country from January 2023. Currently, the company offers housing loans in four cities and loan against property(LAP) in 11 cities and with the launch of small business loans, it plans to reach a balance sheet of Rs 10,000 crore by FY’24.
Manish Shah, MD & CEO, Godrej Capital, told select media persons in Chennai that from January 2023 onwards, it will start offering retail loans pan India to small businesses.
“We will start it in a small way with few variants and we will grow it gradually from April 2023. It would carry interest ranging from 12% to 30% per annum,” he said. It will target small and large traders, manufacturers and service providers.
With the aim of scaling up its ambition in the financial services sector, Godrej Industries launched GCL in April 2022. and said it aims to build a balance sheet of Rs 30,000 crore by 2026. “ We are on track to achieve the target, and by that time we would be needing Rs 5,000 crore equity investment. We believe that the parent could infuse the equity and on the debt side we can look for borrowings fron banks and other financial institutions. We could look for listing during the same period,” he said.
With the aim of building a world class retail financial services business Godrej Industries has invested Rs 1,500 crore in capital in GCL. Housing finance was started by the Godrej group in select geographies in 2020. Having seen strong customer acceptance of its offering, the financial services venture has been formed to further focus on secured loans consisting of home loans and LAP. The company is innovating on loan products with focus on major aspects of flexibility on repayments and tenures.
On the expansion plans, he said that the company will look at increasing its co-lending activities for finacing affordable housing, It has entered into co-lending partnership with five players and are in talks with smaller NBFCs, HFCs and fintech companies for more such partnerships. “ We dont have any meaningfull expertise in this space and there are players who have stronger mechanism to both acquire and underwrite informal income customers which is the primary target group for affordable housing,” he said.
According to Shah, GCL is eyeing a balance sheet of Rs 6,000 crore by March 23 through mortgage, affordable housing and business loans. Housing loans would account for Rs 4,000 crore and LAP Rs 2,000 crore.
The Chennai operations of the company were launched recently with LAP. “The market size of LAP in Chennai is about Rs 1,500 crore per month. Our focus will be on retail loans and LAP. We are eyeing to garner 10% market share from Chennai market alone in 18 months,” he said.