Bajaj Finance may spin off its payments business into separate subsidiary

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Bajaj Finance It’s looking to spin off its payments vertically as a separate subsidiary, while also expecting in the next 3-5 years to expand the range of platforms and apps launched in the last 4-5 years.

the Non-bank financing company It manages about half of all consumer loans in India by volume and has large shares in loan volumes for the purchase of electronic items and iPhones.

The mortgage book grew by 26 percent March quarter It accounted for 28 per cent of the total assets under management, which was at ₹2.47 lakh crore at the end of March. Its payments business is still in its infancy and is expanding.

In a recent interaction at the Jefferies India Forum, Bajaj Finance CEO Rajeev Jain indicated that the company is eyeing a 4-5 per cent stake in retail loans and a 3 per cent stake in the payment segment.

Also read: Bajaj Finance plans to enter the microfinance sector by 2025, says Sanjeev Bajaj

new loan segments

To achieve this, the company is foraying into sectors such as car and tractor loans, commercial vehicles, MFIs and start-ups. These are market segments with a combined potential opportunity of ₹ 13 lakh crores and constitute approximately 28 per cent of retail credit in India. These are the new loan segments that the company expects to drive growth in the medium to long term.

With the aim of driving its loan products, the company has launched a number of applications and platforms while strengthening its branch network, all with a long-term horizon that will soon pay off. The company’s strategy with its digital loan platforms has been to enhance its engagement with its existing customer base, rather than relying solely on new customers. The app already has more than 3.5 crore users with great download speed. The improvement in operating efficiencies from this is expected to offset some pressure in net interest margins in the current year.

Through its loan products, the Company intends to strike a balance between secured and unsecured credit, those that increase its earnings and scale builders and new segments versus those that are part of its existing portfolio.