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Bajaj Finance Limited (Bajaj Finance or BFL) had a strong year aided by a diversified product mix
,robust volume growth, prudent operating cost management and low NPAs. With assets under
management of B 32,410 crore, BFL has emerged as one of the leading diversified NBFCs in the
country. The Company delivered strong results in FY2015, the highlights of which are given below.
Bajaj Finance Limited: Performance highlights, FY2015
Capital adequacy as on 31 March 2015 was 17.97%, which is well above the RBI norms
Group structure
Introduction
Bajaj Finserv Lending offers loans for various needs. We offer loans for Bajaj Auto
Two Wheelers under the name of Bajaj Auto Finance Ltd. We offer Consumer
Durable Loans, Personal Loans, Loan against Property, Small Business Loans,
Construction Equipment Loans, Loan against Securities and Insurance Services
under the name of Bajaj Finserv Lending.
Bajaj Finserv Lending is one of the most diversified NBFCs in the market
catering to more than 5 million customers across the country. Apart from
being a well recognized organization, we pride ourselves for holding the highest
credit rating of FAAA/Stable for any NBFC in the country today. Our product
offerings include Consumer Durable Loans, Personal Loans, Loan against
Property, Small Business Loans, Two-wheeler and Three-wheeler Loans,
Construction Equipment Loans, Loan against Securities and Insurance
Services.
Our unique products feature across all categories and offer a compelling value
proposition to our customers. Our strong presence in the Indian market for over
23 years has enabled us to establish a strong foothold here and we aim to
continuously provide our customers with premium service and exclusive
benefits.
Consumer Lending
BFL was the largest financier of Bajaj motorcycles and Three Wheelers in FY2015. The Company
operates at around 3,000 Bajaj dealers, sub-dealers and authorised service centres across the country. Its
unique Direct Cash Collection (DCC) model in rural and semi-urban markets enabled customers with no
banking habits to repay their EMIs in cash.
BFL continued to be one of the largest consumer durable lenders in India, being present in
161 cities across the country with deployments of B 10,093 crore growth of 49% over FY2014.
Its unique Existing Member Identification (EMI) card enables customers to avail instant credit.
Consumer Durable financing through EMI cards grew by 215% over FY2014.
BFL has expanded its consumer durable financing model to digital products and lifestyle products. BFL
has tied up with leading manufacturers like Samsung, Apple authorised resellers and Sony amongst
others in its digital products financing. Lifestyle products (financing for products like furniture, home
furnishings, etc.) is present in around 3,800 dealer counters. The combined growth in deployments in
digital and lifestyle financing in FY2015 was 173%.
Personal loans cross-sell and salaried personal loans deployments grew by 59% and
102% respectively over FY2014.
Rural Lending
As part of its geographical expansion strategy in FY2015, BFL furthered its rural footprint by setting up
branches in Maharashtra and Gujarat. The major products offered through the rural branch network are
consumer durable loans, gold loans, refinance loans and personal loans. It disbursed 505 crore to 1.31
lakh customers in FY2015. Assets under finance of the rural business as at 31 March 2015 was 333
crore, versus 50 crore in FY2014.
SME Lending
SME lending offers secured and unsecured loans to its customers. Secured lending is done through four
product offerings: Loan Against Property, Lease Rental Discounting, Home Loans to SME customers
and Loans Against Securities.
The Company also offers unsecured working capital loans to affluent small business customers,
doctors and other professionals. Loans against securities business had a good year on the back
of a resurgent equity market and sharper focus by the business team. Bajaj Finance continues to
remain customer centric and does not levy any pre-payment or part pre-payment charges for its
SME customers.
Commercial Lending
BFL auto component manufacturers financing business remained stable in FY2015.
However, given the problems plaguing the infra sector, BFL has exited the Construction
Equipment (CE) financing business and has been selective in infrastructure lending too.
Due to the above, the CE and infra loan book de-grew by 84% and 20% in FY2015.
BFLs conservative approach to portfolio management coupled with a rigorous portfolio review
mechanism has enabled it to get early stress signals in the infrastructure sector and take
corrective action in its infrastructure and construction equipment business. As mentioned before,
Bajaj Finance ended the year with a net NPA of 0.45%. The Company continues to have a
conservative provisioning policy which is more stringent than RBI norms.
Asset Liability Management (ALM)
BFL had a total borrowing of B 26,691 crore as on 31 March 2015. The Companys Asset-Liability
Committee (ALCO), set up in line with the guidelines issued by the RBI, monitors asset-liability
mismatches to ensure that there are no imbalances or excessive concentrations on either side of the
Balance Sheet. BFL continued to raise longer tenor borrowings in FY2015 as well this included B
453 crore Tier II subordinated debt.
Till date, BFL has assigned B 2,985 crore of its receivables including B 827 crore assigned in
FY2015. The net receivables due as on 31 March 2015 amounted to B 1,210 crore.
The Company continues to very closely monitor liquidity in the market and as a part of its ALCO
strategy, maintains a liquidity management desk to reduce its liquidity risk. The liquidity buffer is
stepped up whenever signs of tight liquidity in the system is noticeable.
Technology
BFL has been a leader in technology adoption among NBFCs, and has used it to enhance
customer service and streamline back-office operations. It has leveraged technology in all
business lines and related operations and has a strong technology orientation.
Disaster Recovery (DR) data centres have been set up to ensure business continuity for customer
acquisition, loan processing and servicing.
Customer service
BFL continues to remain customer centric in its policies and practices. It provides its customers
multi-channel options across call centre, IVR, online portal, branch and mobile applications. It also
annually benchmarks its customer service practices by seeking feedback through an independent
customer service survey.
In FY2015, BFL has worked closely with Unique Identification Authority of India (UIDAI) to assist in
accessing the e-KYC customer database. This will substantially improve customer experience and
should help grow the business in the upcoming year.
Human resources
The Company continues to lay emphasis on people, its most valuable resource. In an increasingly
competitive market for human resources, it seriously focuses on attracting and retaining the right
talent. It provides equal opportunity to employees to deliver results. During FY2015, Bajaj Finance
added 2,093 employees, taking the total employee strength to 5,058.
In FY2015, BFL was recognised as among the top three employers in the Banking and Financial
Services Industries space by Great Places to Work. It was also recognised by AON Hewitt in its
ranking of the best employers in India.
The Company BFL focuses on five broad categories: (i) Consumer Lending, (ii) SME Lending, (iii)
Commercial Lending, (iv) Rural Lending, and (v) Fixed Deposits and Fee Based Product Distribution.
The Companys product suites are given below.
Verticals Product
Consumer Lending
SME Lending
Commercial Lending
Auto Component Manufacturer Financing
Infrastructure Finance
Construction Equipment
Rural Lending
Gold Loans
Refinance Loans
Fixed Deposits and Fee Based Products
Fixed Deposits
Life Insurance Distribution
General Insurance Distribution
Credit Rating Distribution
Property Fitness Reports
A Few Differentiators
Last mile
connectivity
through cloud
platform at over
10,500 stores
EMI card
franchise of over
3.5 million
Direct cash
collection model
for unbanked
rural
customers
Consumer
Low ticket high
velocity
collections
capability
Flow based
underwriting for
SME businesses
on cloud platform
Flexi loans to
SME customers
Flexibility to
prepay and
withdraw
SME
Mid market
focus
Commercial
Digital Grid
capability for
Salaried Personal
Loan and
Salaried Home
Loans business
Property Fitness
Report for
mortgage
customers
Financial Fitness
Report for retail
customers
Financial Fitness
Report for SME
clients
Property Fitness
Report for
Mortgage
customers
Branch based
multi product
distribution
Rural Sales
Authorised
& Service
Centres (ASSC)
model
Specialised
industry vertical
EMI Card
franchise
Domain
expertise
C O N S U M E R D U R A B L E LO A N S
Bajaj Finserv Lending is one of the leading financiers in the market offering consumer
durable loans on EMI.
Now you can easily avail a loan for products like LCD, LED, Color TV, Refrigerator,
Washing Machine, Air Conditioner, Music System, Microwave etc amongst a host of
other products.
Bajaj Finserv Lending consumer durable loan comes with 0% financing and with a small fee.
You can apply online on our website and get an instant approval or visit a dealership to easily
avail a loan. We provide on the spot approval with minimum documentation & fast processing.
FEATURES & BENEFITS
Features
Bajaj Finance, the sole organized financier in the market offering Consumer Durable loans offers you
Dreams on EMI, with 0% finance options also available. CD loans are EMI loans for Consumer Durable
items like Washing Machines, Refrigerators, Color TV's, LCD's etc. These CD loans come at a very
reasonable pr ice, with a very simple process. You can just walk into one of our Dealer partner
showrooms and avail of this facility for the item of your choice. Loans are available for amounts more
than Rs.7000. Multiple Credit programs are also available to suit your fitment.
Avail loans ranging from Rs. 7,000 to Rs. 5,00,000 for Washing Machines,
Refrigerators, Color TVs, LCDs and other consumer durables.
Apply Online or walk in to one of our Dealer Partner showrooms and get your loan
approved in 15 minutes.
Benefits
yes
Yes
Residence proof
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
IT
Processing Fees
Rs.499/- to Rs.599/Rs.599/- to Rs.699/Rs.699/- to Rs.799/AMOUNT
Foreclosure Charges
NIL
PDC Swapping
Rs. 500
Cheque Bounce - Rs. 350 per cheque
Late payment penalty - Rs. 150
Bounce Charges
Product Loans
Features
Bajaj Finance, the sole organized financier in the market offering IT Product loans, offer s you Dream
Desktop/Laptop on EMI, with 0% options also available. These IT Product loans come at a very
reasonable price, with a very simple process. You can just walk into one of our Dealer partner showrooms
and avail of this facility for the item of your choice. PC loans are available up to 100% of the product
price. Loans are available for amounts above Rs. 20000.
Benefits
0% finance options available (for select schemes).
Simple process with minimum documentation.
On the spot approvals with fastest processing.
Flexible repayment options.
ECS clearing, reducing hassle of arranging cheques.
Extended Warranty available.
Salaried
Self Employed
Photo Id Proof
Yes
Yes
Residence proof
Yes
Yes
3 Cheques
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Insurance Services
Bajaj Auto Finance Limited (BAFL) has tied up with Bajaj Allianz Life (part of Bajaj Group), to offer a
rich bouquet of world class life insurance products to suit the financial needs of all segments of buyers
through different stages of their lives. With its successful track record and its highly acclaimed standing,
Bajaj Allianz Life Insurance Company (BALI C) prides on serving over 8 million Indian customers.
BAFL shares BALIC's philosophy of providing insurance solutions relevant to the customer's needs.
Business Strategy
Focus on
Diversified & profitably growth through its distinct Consumer, SME, Commercial &
Rural Verticals
Financial Information
Balance Sheet
Capital adequacy ratio (including Tier-II capital) stood at 18.69%. The tier I capital stood at 14.72%.
The Company continues to be well capitalized to support its growth trajectory.
Market Assessment :
Bank credit growth was at historical low of 10% in the first half with Public Sector Banks recording a
growth of only 7.9%. Bank deposit grew by 12.9%. Output gap in the economy remains at an all time
low. Demand momentum is weak but mood is buoyant. Discretionary spending surged in the festive
month but has slowed dramatically in the last two months.
Auto sector is showing some revival with nine months growth of Two wheeler, Passenger and
Commercial vehicles at 12%, 3%, -7% respectively.
Real estate sector was amongst the worst performing investment asset class in 2014-15 with lowest
appreciation rate in the last 5 years (Gold being the other).
Business Commentary :
Overall a very good festival quarter for the company with robust volume momentum & strong credit
performance across Consumer & SME businesses despite a weak demand environment in second half of
the quarter..
The company continued to readjust its portfolio mix to reduce the beta in its business model.
Two Wheeler financing penetration of Bajaj Auto domestic Two Wheeler sales inched up to 37% due to
increased financing demand during festival. Overall volume for the quarter dropped by 10% YoY.
Three Wheeler business volume reduced by 39% due to portfolio quality challenges. Three Wheeler
financing penetration of Bajaj Auto domestic Three Wheeler sales in these locations currently at 15%.
Consumer Durable business had its best ever quarter. It disbursed 1.12 million cases ( 61% YOY)
despite 15% to 18% industry growth. Rewarding promotional schemes & contests to existing & EMI
card customers, Several promotional schemes by manufactures, Geo expansion and category extensions
with proactive capability builds have helped deliver this solid growth in Q3. The company has managed
to seamlessly process & decision more than 65K application on the day of Dhanteras.
The company sourced 22 K cases through its cutting edge mobile application during this quarter.
Lifestyle Finance business disbursed 124 K accounts (350% growth), another highest for any quarter
driven by Digital products. Tie-ups with leading manufacturers like Samsung, Apple, Sony and leading
national & regional wireless chains enabled the business register this growth. Non-digital Lifestyle
business grew by 62% YOY. Given the profit pool opportunity and different orientation required
between digital & other lifestyle products, the company has now carved out a 3rd business viz.
Digital Financing within the sales finance business to dominate the financing space in forthcoming
years.
Cross sell momentum across Lending and Fee products remained strong.
Salaried personal loans business continued to grow well with healthy credit performance. Digital
channels now contributes 16% of new originations.
Rural Lending business delivered strong momentum in Q3. The business has now cumulatively broken
even and is profitable. Company continues to increase its footprint in a measured manner. Work on
launching MSME rural lending business has been initiated.
Business loans business continued to grow very well with strong credit performance. Professional loans
now contribute to 17%-18% of Business loans origination. The company has carved out Professional
loans as a separate business structure to tap high growth opportunity in this counter cyclical business.
Mortgage business is in hyper competitive situation as all lenders want to grow this asset class. LAP
business is in consolidation mode and is growing at a slower rate than company AUM growth.
LAS business had an excellent quarter supported by new product & renewed channels strategy.