Shriram Group, the Chennai based financial institution is set to foray into the gold loan segment. The company would rely on its robust client base and branch network as core competencies. Currently, the consumer finance division of the Group, Shriram city union finance ( Scuf) operates in gold loan business.
As Scuf operates primarily in Maharashtra and south India, the car loan division of the company, Shriram Transport Finance ( STFC) would also participate in the business due to its bigger customer base and branch network.
R Sridhar, STFC MD, said ” We will be lending gold loans on behalf of Shriram city union and they will remain in the books of that company. We have over seven lakh truck operators as customers besides a large number of investors. Plus, we have a country wide network of 500 branches. We are aiming to have a gold loan portfolio of Rs 1000 crore”.
It would help the company in raising its fee based income and allow it to use its funds for short term. Shridhar said that since the gold loanschurn quickly, it would be simple to retain the portfolio size.
The scheme has already commenced in Delhi.