HomePet Industry NewsPet Financial NewsMicrofinance lender CreditAccess Grameen focuses on secured loans

Microfinance lender CreditAccess Grameen focuses on secured loans

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Mumbai: Microlender CreditAccess Grameen plans to foray into secured lending segments like mortgages, gold loans and two-wheeler loans, in an try and diversify its product base, Udaya Kumar Hebbar, managing director and chief govt stated on Wednesday.

“We do secured loans however it is extremely small. Perhaps, in 5 years, we could also be doing 5,000-6,000 crore of non-microfinance loans and a majority of this might be secured loans,” stated Hebbar.

It’s already operating pilots in all branches on mortgage towards property (LAP), which is a part of the mortgage phase that additionally includes dwelling loans. The mortgage towards property product is supposed for small companies. For gold mortgage, it’s testing the waters in round six-seven branches and plans to roll out extra pilots in additional geographies. Whereas mortgage ticket sizes might be within the vary of 6-8 lakh, gold mortgage might be about 45,000-50,000, and ticket sizes of two-wheeler loans might be 70,000-75,000.

“We imagine in creating the appropriate mannequin earlier than scaling it up. This can be a starting for us and we have to actually perceive this new mannequin. We’re specialists in microfinance however are but to be so in non-microfinance loans,” he stated.

In accordance with Ganesh Narayanan, deputy chief govt officer and chief enterprise officer, among the many secured mortgage segments, gold mortgage will take a bit extra time owing to its nature as a extremely process-driven cross-sell product. The microlender has already employed folks with the skillsets required to help underwriting of those new merchandise.

CreditAccess Grameen now plans to boost as much as 500 crore via a public concern of secured, redeemable, non-convertible debentures of the face worth of Rs. 1,000 every. The bottom concern measurement is 250 crore with an choice to retain oversubscription of as much as 250 crore. The minimal utility measurement can be 10,000 and buyers would have tenure choices of 24 months, 36 months and 60 months.

The coupon would vary from 9.45-10%, relying on the tenure. The corporate stated in a press release that efficient yield each year for NCD holders in all classes vary from 9.83% to 10.46%.

 

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