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High yield product contribution to build to 25-30%
Customers are screened on their ability to make payments in the first 18 months. After that, the customer's equity is greater
than the company's equity, and so it is assumed that the customer will pay.
Has offices at 172 locations across the country and expects to reach 240 by 2014. 80% are in semi-urban and rural regions,
which is a niche segment of the company. The loan book is 100% retail. Average ticket size of loan is INR7lacs.
There are multiple filters for each loan to go through, including one which includes soft feedback in which the local
executive goes personally to the customer's location to get details.
Industry practice is to make collections every 3-6 months, but Magma collects monthly.
Competition is largely from companies like Sundaram Finance, Shriram Transport, Tata Finance rather than banks.
Funding sources are working capital limits from banks, securitisation, and term loans/bonds/debentures.
NIM is at 5.1% in the first 9 months. NIM has dropped from Q2 to Q3 due to higher cost of funds.
Increased contribution of high yielding products to 19% from 9% in FY09 and 13% in FY10. Expects to increase it to 20%
by end FY10 and further target to increase to 25% by FY11 and 30% by FY12.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
High yield product contribution to build to 25-30%
Customers are screened on their ability to make payments in the first 18 months. After that, the customer's equity is greater
than the company's equity, and so it is assumed that the customer will pay.
Has offices at 172 locations across the country and expects to reach 240 by 2014. 80% are in semi-urban and rural regions,
which is a niche segment of the company. The loan book is 100% retail. Average ticket size of loan is INR7lacs.
There are multiple filters for each loan to go through, including one which includes soft feedback in which the local
executive goes personally to the customer's location to get details.
Industry practice is to make collections every 3-6 months, but Magma collects monthly.
Competition is largely from companies like Sundaram Finance, Shriram Transport, Tata Finance rather than banks.
Funding sources are working capital limits from banks, securitisation, and term loans/bonds/debentures.
NIM is at 5.1% in the first 9 months. NIM has dropped from Q2 to Q3 due to higher cost of funds.
Increased contribution of high yielding products to 19% from 9% in FY09 and 13% in FY10. Expects to increase it to 20%
by end FY10 and further target to increase to 25% by FY11 and 30% by FY12.
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