Anshu Jain-backed non-banking finance company InCred Finance is in talks with a clutch of microfinance companies for either a total buyout or controlling stake, two people familiar with the matter told ET.
The company, which lends for personal and small business needs, affordable homes and education, is keen on lending in rural India by entering the microfinance business.
“The market has responded positively to our current set of product offerings. Encouraged by this reaction, we are now expanding into microfinance – which was always core to InCred’s strategy,” said Bhupinder Singh, CEO of InCred Finance.
The former head of investment banking for Asia Pacific at Deutsche Bank declined to give details of the company’s plans in this segment, but the persons cited earlier said the company is likely to launch formal operations in microfinance in a few months.
The company, which kicked off operations in February this year, aims to achieve a microloan book of Rs 500 crore in the next couple of years, they said, adding that initially, it will tap the business potential in Rajasthan, Bihar, Uttar Pradesh and Punjab. This, however, could not be confirmed with Singh or the company.
Since February, the new-age financial services platform has disbursed Rs 100 crore in loans to about 1,000 customers in less than 100 days, it had said in a press release a few weeks ago.
Singh said, “At InCred, our products will enable us to differentiate ourselves and capture a significant slice of the intensely competitive market.”
Singh has already obtained support from industry doyens for his businesses. Anshu Jain, former Deutsche Bank’s co-chief, is the chairperson of InCred’s advisory board, which also includes former chairman of Bank of Baroda, MD Mallya. Manipal Group’s managing director Ranjan R Pai has also funded his company.
InCred Finance has set up its first set of branches in Mumbai (Borivali and Thane), Surat, Ahmedabad, and Pune. It plans to expand its footprint to other cities soon.
The company is driving growth through initiatives beyond the traditional brick-and-mortar branch model. It has implemented a technology-enabled lending process and uses algorithmic alternate data for quicker decision-making in loan processing.