Aditya Birla Finance bets on SMEs as it looks to expand to 50 cities

Stock Market : By the end of July Aditya Birla Finance Limited (ABFL) will be present in 50 cities (Tier I, II and III) across the country, growing from tapping 70 per cent of small-medium enterprises’ (SMEs) demand for credit, at present, to 85 per cent of the SME credit pool. The company has grown its lending book by 25 per cent to Rs 432.4 billion at the end of FY2018, with 27 per cent of ABFLs credit products being sold to SMEs.

“The biggest challenge is to have a uniformity in terms of quality, culture and risk management across all our branches. Our biggest strength is that we strive our best to maintain this uniformity,” says Rakesh Singh, chief executive officer at ABFL.

Large corporates make up 33 per cent of ABFLs lending book, followed by mid-corporates at 17 per cent and retail customers at 11 per cent.

The company sees the SME segment as the primary engine of growth over the coming years.

“We believe the license to grow in the lending business comes from managing risks well,” he told Business Standard, “One needs to maintain the same quality and controls across the entire distribution including the smallest of branches.”

By implementing a top-down approach the company has built strong sales and risk processes, a toques control framework where a system of approvals and delegation has been put in place.

Click here to know - Aditya Birla Finance Limited Stock Price