RIL, Trying the Waters of Consumer Finance

Finance


Mumbai : Reliance Industries Limited (RIL) is testing a consumer durables financing program under the Jio brand at select Reliance digital outlets before rolling out Jio Financial Services later this year. said a development official.

Mumbai : Reliance Industries Limited (RIL) is testing a consumer durables financing program under the Jio brand at select Reliance digital outlets before rolling out Jio Financial Services later this year. said a development official.

mint visited two neighboring stores in Mumbai and Thane and spoke with executives from four other stores about the availability of a loan called Jio Finance. Executives said customers will be offered Jio Finance options alongside other banks and non-bank financial institutions.

mint visited two neighboring stores in Mumbai and Thane and spoke with executives from four other stores about the availability of a loan called Jio Finance. Executives said customers will be offered Jio Finance options alongside other banks and non-bank financial institutions.

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Billionaire Mukesh Ambani’s RIL is launching Jio Financial Services, a venture born out of the spin-off of Reliance’s financial services business, to take on incumbent financiers like Bajaj Finance. In May, shareholders and creditors approved a spin-off of Reliance Strategic Investments, renaming it Jio Financial Services. Macquarie expects the combined company to be the fifth-largest financial services company by net worth.

The company is piloting a lending program and plans to roll out similar programs at more stores, executives said.

“Jio offers fixed monthly installment (EMI) loans to home appliance customers,” said one store executive, who requested anonymity. Incumbent financiers offer similar products at retail outlets, while financiers who buy their own brands offer similar products, he said. Reliance can benefit even more with Jio Finance.

There is also the issue of teething. An executive said the new service has taken time to approve the purchase of financial collateral for some customers. An email sent to a RIL spokesperson was not responded to by the time of this writing.

Since the announcement last October, analysts have warned that Jio’s entry could have a disruptive impact on the non-bank financial industry. Ambani’s foray into ultra-low-cost telecom and streaming services has shaken the industry, forcing competitors to adjust their strategies to remain competitive in a price-sensitive market.

“Reliance is well-funded, so Jio Financial’s services will be closely tracked by the industry. It’s not easy to replicate the model,” said the financial sector analyst, who asked not to be named.

Given the group’s strong presence in retail and telecoms alongside vendor partnerships, analysts at Jefferies said Jio Financial Services is likely to see consumer lending, particularly electronics lending and affiliation. He pointed out that it could start with store financing.

“All the necessary approvals for Jio Financial Services’ stock listing should be in place by September. Regulatory approval is expected to take 12 to 18 months,” analysts at Jefferies said in a note dated April 1.

Against the backdrop of strong consumer demand, some of India’s largest financial institutions have begun to take aggressive steps in retail, particularly in the unsecured loan sector, with pre-approved offers and quick loan turnarounds. Credit bureau TransUnion Civil’s April report found “a notable increase in demand for credit cards and personal loans,” reflecting the increasing adoption of consumption-driven credit products. said to indicate that

Expectations for this new venture are also piqued by lenders. A commercial bank executive said the market was big enough to accommodate new entrants, but that would depend on the products Jio launches.

The banker said Jio Financial Services could consider offering financing for its devices, just as US telecom companies bundle mobile phones with other services.



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