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Key Aspects
- The Secured Micro Loan Business segment product line caters to funding short term and medium term working capital needs of Small Businesses and individuals, via a suite of customized short and long tenured products, with collateral.
- Offerings comprise Secured Micro Loan to self-employed individuals/ non-individual entities, with end use of funds (Working capital requirement, business expansion etc.) to be ascertained during the loan appraisal process.
- The business is highly retail in nature, characterized by high transaction volumes, smaller ticket sizes, and significantly higher spread and profit margins (up to four times that of Secured Lending products)
- Given the Secured Micro Loan nature of loans disbursed, the business also entails stringent controls and monitoring to ensure portfolio health and quality at all times
- While unit of sizing up the business is its loan book size, profitability and minimized delinquency are key business objectives.
- Higher cost of funding impacts profitability as well as competitiveness of loan rates that can be offered to customers
- Understanding of product market characteristics such as connector relationship management, region specific occupations/trade, local financial preferences and practices are important to gain competitive advantage while structuring loans and identifying leads.
- The RO/RM – ABCL is responsible for achieving sales targets as agreed with the Loaction Head (Sales) – ABCL, in terms of targeted book size, profitability, growth & customer service objectives.