Equitas Small Finance Bank, a “new-age” Indian bank that launched in 2007 with a focus on online lending, announced plans to place greater focus on commercial auto lending in the coming years, according to local reports.
The bank’s vehicle finance portfolio currently totals around $357.6 million, Managing Director and Chief Executive P.N. Vasudevan told the Press Trust of India.
New vehicles only make up $21.4 million of that portfolio — about 6% — and Equitas looks to grow new vehicle financing to 40% of the portfolio over the next two years.
The bank has been lending for used commercial vehicles for a number of years, but as collections slowed in this space following the country’s 2016 demonetization policy, Vasudevan is expecting the new vehicle commercial segment to pick up the pace.
“New vehicles continue to do well and the new vehicle market actually has been growing well for the manufacturers also in the current year,” he said on the company’s 3Q fiscal year 2018 earnings call. “Growth has been a little tempered because for us almost 95% of the book currently is used commercial vehicle financing.”
The Chennai, India-based bank has invested $28.6 million in digitization efforts and now 92% of the bank’s digital transactions are conducted online, Vasudevan told PTI.
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