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Retail portfolio climbs steadily

L&T Finance Holdings has continued to grow its first ‘digital native’ consumer loans business:

Retail portfolio climbs steadily

L&T Finance Holdings (LTFH), among the market leaders in farm equipment finance, 2-wheeler finance, as well as rural business finance, has maintained strong business growth in line with its Lakshya 2026 strategic plan. LTFH’s retail disbursements are at an all-time high, even surpassing its highest ever retail disbursements registered last quarter. It has recorded highest-ever quarterly retail disbursements at Rs102.38 billion, up 15% q/q and 84% y/y. Its retail portfolio mix is at 58%, up from 47% y/y. Its retail book stands at Rs520.40 bn.

LTFH’s results in Q2FY23 showcase its steadfast commitment towards accelerated retailization. Dinanath Dubhashi, MD & CEO, LTFH, explains: “Our retail portfolio mix has reached 58%, up from 47% in Q2FY22, aided by the steady growth witnessed across business segments. rural business finance and 2-wheeler finance registered highest ever disbursements during the quarter. while contributing towards accelerated retailization of the loan portfolio. We have continued delivery of retailization strategy plan, powered by Fintech@Scale.”

Scaling Up Digital Products

LTFH is powering up with digital technology and new products to support future growth. LTFH has continued to grow its first ‘digital native’ consumer loans business, achieving a monthly run-rate of over Rs4 bn+ during the quarter (total disbursements of Rs13.28 bn in Q2FY23, up 32% q/q). Its market share increased in the quarter led by the ‘Sabse Khas’ loan and ‘Income Proof’ loan offerings along with continued focus on deepening geo-presence. It has continued scale-up of end-to-end digital products- wherein it has registered disbursements of Rs13.28 bn in consumer loans, up by 32% q/q. Its latest offering in SME, whose pilot was launched in Q3FY22, witnessed a steady uptick in Q2FY23 with quarterly disbursements crossing Rs2 bn and the portfolio size reaching Rs3.21 bn, led by significant geographical and channel expansion. Going forward it expects to sustain the momentum by further launching new products under the business segment.

Dinanath underlines: “Our sustained focus on business strengths as well as deep integration of data analytics in the decision-making process across the customer lifecycle helped us hit new milestones in our home loan segment while scaling up consumer and SME loans. Driven by data analytics-led business rule engines, we saw robust disbursements in our chosen ‘Right to Win’ market leading retail products.”

Data Analytics, New Channels

By maintaining a strong focus on customer value and building preferred dealer / OEM relationships to grow market share, LTFH’s business is delivering on a strategy built around dominating counter share of preferred partners and offering mutual value by leveraging the increased application of data analytics. LTFH has remained focused on enhancing disbursement volumes through strategic measures like deepening geographic presence, solid DSA partnerships & increasing customer retention through pro-active & improved service proposition. Additionally, the business continues to build a significant scale by cross-selling to LTFH’s existing as well as to open market customers.

With the use of analytics, LTFH will deliver value-added proposition for its customers and channels. It has witnessed best in class collections in Q2FY23, across retail businesses. Collection efficiency in 2-wheeler finance has been maintained at 99% through focus on digital collections, enhanced resolutions through call centre and on-field resources. Collection performance in home loans/LAP has continued to be over 99% through strengthened on-field support and use of data analytics. Total collections across retail businesses stood at Rs75.87 bn in Q2FY23, up 17% y/y.

Dinanath points out: “We have increased our customer funnel through new channels, namely, new partnerships with e-aggregators and insta-loans offerings to potential customers. We continue to focus on maintaining prudent liquidity, strengthening the balance sheet, following a data analytics-based collections approach. Our collections are led by our concerted on-field efforts, analytics led prioritization and use of propensity-based data analytics to channelize resources.”

Planet App

During the quarter, LTFH has continued to emphasize on customer facing applications, with a clear focus on expanding the existing channels and ecosystems and creating newer channels. Its customer facing application – Planet was soft-launched in Q4FY22. The application, available on both Appstore and Playstore, was limited to onboarding and servicing customers till Q1FY23. Dinanath reveals: “Planet app has shown a steady uptick with close to 0.7 million downloads, up from 0.2 million till Q1FY23. We achieved disbursements of more than Rs1.26 bn in Q2FY23 while servicing more than 0.75 million customers due to the app. We expect to continue scaling it in coming quarters to make it a full-fledged and reimagined customer engagement engine.”


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