M&M Financial Services Banks On Repeat Customers To Defy Auto Slowdown
M&M Financial Services is also relying on its wide network in rural and semi-urban areas to combat the auto slowdown, says CFO.
Mahindra & Mahindra Financial Services Ltd. is leveraging its base of repeat customers and wide network in remote areas, among other measures, to defy the worst auto slowdown to grip the sector in decades.
“What we are doing in these times of slowdown is concentrating on repeat customers. We seek customers who are about to complete their terms for the earlier products (tractors, trucks, small equipment or commercial vehicles) and offer some flexible schemes since we are very comfortable with their cash flows and track record of paying on time,” V Ravi, chief financial officer of M&M Financial Services, said in an interview with BloombergQuint.
The second thing M&M Financial Services is relying on is its wide network in rural and semi-urban areas to combat the auto slowdown.
“We have some 6,000 touch points, especially semi-urban and rural areas. This is another area where we have tremendous strength of reach. We reach some 3,25,000 villages, much more than any PSB (public sector bank) or any other NBFC,” he said, adding that the non-bank lender is trying to enter close to 50,000 villages where it found a dearth of vehicles or tractors.
While Mahindra tractor and car sales have been hit by the auto slowdown, they’ve still managed to produce marginal returns amid a sharp drop in auto sales, Ravi said.
The next two months, according to Ravi, are going to be a period of great hope. “If the festival season turns out okay, we are hoping for a double-digit growth. So far, we have had only about 5 percent growth.”
Watch the full interaction with Mahindra Finance CFO V Ravi here: