The service economy continues to be the silver lining in an economic environment riddled with volatility and uncertainty. While everything seems to be in a state of flux, the growth of various lifestyle categories stays on course, largely driven by the demographic dividend, growing disposable incomes, changing social structure and a bulging middle class. However, the spate of interest rate hikes and recent monetary policy changes dampen the spirit and threaten to slow things down. There are already signs of a possible slowdown in the growth of consumer durables category that has seen galloping growths in the recent past.
Against this backdrop, 0% interest consumer finance holds the promise to bail things out and keep the growth engines chugging. In turn, allowing people to live their aspired lifestyles.
Today, 0% finance holds an over 11% share in the total consumer durables industry. Out of the total sales of over INR 36850 Cr annually, over 4053 Crs are bought on 0% interest finance. While the industry is growing at 9% YOY, 0% interest finance is growing at 13 times as much with over 118% growth YOY.
In turn, Bajaj FInserv Lending continues to be the largest driver of this growth with over 9% share and growing at 88% YOY. This puts Bajaj Finserv Lending in a clear leadership position. Today, one out of every 5 flat panel TVs is bought on the 0% interest consumer durables loans option from Bajaj Finserv Lending. This growth has come at the back of significant investments made in distribution, technology and process automation.
“We have invested deep in technology and process innovations to create long term sustainable advantages. This has allowed us to create win-win propositions for all members in the ecosystem”, says Rajeev Jain CEO Bajaj Finserv Lending.
Available at over 4,000 outlets across the country across metros, tier 2&3 cities, Bajaj Finserv Lending 0% interest consumer durables loans are available in places where other finance options like credit cards may have low penetration. Even where other finance options are available, Bajaj Finserv Lending 0% interest option offers a far better experience. All a customer needs to do is to walk into any of the consumer durables stores in the country, choose the desired product, and approach the in-store Bajaj Finserv Lending representative. Within a few minutes, the person gets an approval on the loan. The customer pays the defined down payment for the selected product and the remaining amount, is divided into equal monthly installments. The customer can also choose from a range of loan tenors, ranging from 12 to 18 months. This brings down the cost of ownership and also helps the customer trade up. For example, if a person had a budget of 40,000, in case of a cash-down option, he would have managed to get a 32inch LED. With 0% interest consumer durable loan, he can now trade up to a 46 inch LED and bridge the gap with the 0% interest consumer durable loan. What’s more. In the case, he may choose to pay down an even lesser amount than 40,000 as the down payment and keep the rest as his savings.
“We have developed credit policies and created partnerships to ensure the customer goes through a simple, hassle-free and quick process. Our technology platforms allow us to approve loans in as low as 3 minutes while he is in the shop, selecting his favorite product. For the customer, this life-event should be about buying his aspirational device without having to worry about the money he may need”, says Devang Mody, Business Head, Sales Finance, Bajaj Finserv Lending.
The company has gone a step further and introduced an innovative offering through the EMI card. Available only for existing 0% interest consumer durable loans customers, the EMI card allows an existing customer to go to any of the Bajaj Finserv Lending affiliated stores and pay for his next consumer durable purchase with a simple swipe of the EMI card. The customer already has a pre-assigned loan line on his account that is determined through the internal policy framework and past behavior on his previous loan.
“Our long-term strategic intent is to do more with our existing customer. EMI card is a proof point of how we approach innovation and our internal policy framework to create compelling long term brand propositions for our customers”, adds Rajeev.