Our growth trajectory not hit by slowdown, says TVS Credit CEO Venkatraman Gopalakrishnan

TVS Credit Services Ltd is keen on establishing itself as an independent financing arm providing credit to two-wheelers, used cars, tractors, used tractors and used trucks.

Published: 02nd September 2019 08:11 AM  |   Last Updated: 02nd September 2019 08:11 AM   |  A+A-


TVS (Photo | PTI)

Express News Service

NEW DELHI: TVS Credit Services Ltd, which began as a retail financing arm for TVS Motor Co, is keen on establishing itself as an independent financing arm providing credit to two-wheelers, used cars, tractors, used tractors and used trucks. Despite the auto and NBFC (non-banking financial companies) sectors facing the worst crisis in last one decade, Venkatraman Gopalakrishnan, CEO, TVS Credit Services, is upbeat about growth of the industry in general and the company in particular, on the back of retail demand and used vehicle market. 

Is it a good time for retail loan market? How do you see the growth of your company amidst slowdown in demand?

I think there will be some consolidation and more regulation, but in the long run, it will be good. I feel that it does not have much impact over companies with better business models. Lenders will be choosier. Yes, companies with governance issues and weaker business models will have to face problems. In some cases, margins can be impacted, but with re-engineering of business models, it can be managed.

I think the slowdown is short-term. It happened in 2008; it happened around 1998 as well. Yes, there is a liquidity crunch, but it is a short-term problem that we have to live with. Orders are down by 20 per cent in MSMEs, but I feel it is cyclical and because the economy is sluggish. But outside real estate and some portions of MSMEs, I do not see any long-term threat.

Slowdown has not really impacted the growth trajectory of TVS Credit. We have been growing at 27-28 per cent for the last few years, and we may continue to do so for next 5-10 years. Our focus will be the self-employed and mid-market segments.

The government has taken some measures. Will they help the sector?

Certainly! For the first time, special measures were taken for the NBFC sector in this year’s budget. The definition of the sector was extended beyond shadow banking. The government has acknowledged the contribution of the sector in boosting the GDP. For sectors like auto, trucks, tractors and MSMEs, consumer finance is closely linked to NBFCs, which play a greater role than traditional banks. With government measures, this will improve.

How long will it take for the market to revive completely?

It may take a year or 18 months from now for the customers’ confidence to be re-established and the market to bounce back.

In this context, where do you see double-digit growth coming from?

We have moved from two-wheeler finance to commercial vehicles, and have stepped into consumer durables as well. We are completely in-house. The benefit of this model is that we are able to draw and retain talent and focus on productive output. As I said, we have re-oriented focus towards self-employed India, and aim to reach out to the whole business ecosystem. Last year, we had Assets Under Management worth Rs 8,500 crore and net profit of Rs 200 crore. We hope to continue the momentum this year.


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