Innovative construction equipment finance schemes from L&T Finance
"Be It Diversification of Portfolio or Customer Connectivity, L&T Finance is Always a Step Ahead," Says Mr. G.C. Rangan, Chief Operating Officer, L&T Finance.
L&T has been directing its focus towards SMEs of late. Please shed some light on your potential customers in this segment. What makes you inclined towards them and what are your offerings for them?
In India, growth story of SME is in initial stages and yet to take off completely. LTF wants to be a significant partner to it. We have offerings of Term Loan, Working Capital Loan and Vendor Finance for these segments. Particularly in Construction Industry, we foresee huge potential in contractor and hiring segment and want to leverage our name and presence to make most of opportunity.
What was on offer this time from L&T Finance? Were there any new financial schemes in sync with the prevailing market sentiments? Regular schemes with moratorium period and free insurance were there. Additionally, considering current market condition, LTF designed and offered schemes with longer tenure (up to 5 years), so as to reduce EMI burden on the customer. This was first of its kind initiative in CE industry. Also, to reduce stress on customer, we offered schemes requiring lower margin from customer's side.
When it comes to CE, one of the major issues is the cumbersome tax structure, due to which, the price of an asset varies from one state to the other. How do you factor this in your financial schemes bearing in mind the impact it might have on your profitability?
The tax component is been considered in the invoice cost of the equipment. We consider the invoice of the equipment as the base for funding. So practically tax structure does not signify in Loan product. But for Leasing product "Residual Value" is an important factor to structure the transaction and the residual value is directly linked with the tax structure of the state. We are working on continuously to overcome the issue.
How do you create a 'comfort zone' for customers so that they stick to your brand?
'L&T' is a well established brand with very high awareness in our customer segment. We leverage it and design personalized and customized offering for our clients. Our presence from Metro to Rural India helps us in reaching out to all sets of customers, be it rural First Time Buyers or mid & large Corporate handling mega Infrastructure projects. Thereby, our visibility and recall are among the best. In addition to it, our experienced team helps deliver customer delight.
NBM&CW January 2014
