Chennai-based financial conglomerate, Shriram group plans to increase its gold loan portfolio leveraging its strong customer base and branch network.
Currently gold loans are advanced by its consumer finance entity, Shriram city union finance (Scuf).
With Scuf' s operations restricted mainly to south and Maharashtra, the group's commercial vehicle financing entity, Shriram Transport Finance (STFC) with a large customer base and branch network will be involved in scaling up the business.
STFC MD, R Sridhar in an interaction with media in Chennai yesterday said the company would be lending gold loans on behalf of Scuf and they would remain in the books of the company. He added that with over 7 lakh truck operators as customers in addition to large number of investors and a country wide network of 500 branches the group was aiming for a gold loan portfolio of Rs1,000 crore.
It would help the company deploy its funds over the short term and increase its fee-based income and with the gold loans churning quickly it hoped to maintain the portfolio size, he added. The scheme has already been launched in Delhi.
He added that Shriram Automall India, which was launched in March in Tamil Nadu to facilitate organised trading in trucks for small truck operators had sold 300 to 400 vehicles and with this and other fee based activities the source of income is expected to double to Rs60 crore this year and Rs100 crore next year.