Bajaj Finance Limited, a subsidiary of Bajaj Finserv, has emerged as one of the leading non-banking financial companies (NBFCs) in India. With a diversified portfolio of products and services, Bajaj Finance has been able to cater to the financial needs of millions of customers across the country. Over the years, the company has established itself as a reliable and trustworthy player in the market, with a strong focus on customer service and innovation. This article takes a deep dive into the success story of Bajaj Finance, exploring the key factors that have contributed to its growth and dominance in the NBFC space.
Bajaj Finance Emerges as a Leading NBFC in India: A Deep Dive
Bajaj Finance Limited, the lending arm of Bajaj Finserv, has emerged as one of the leading non-banking financial companies (NBFCs) in India. The company has been consistently delivering strong financial performance with a focus on innovation and customer-centricity. In this article, we will take a deep dive into Bajaj Finance’s journey so far and understand the factors that have contributed to its success.
Bajaj Finance was founded in 1987 as Bajaj Auto Finance Limited. It started as a captive auto finance company of Bajaj Auto Limited and later expanded into consumer finance, SME finance, and commercial lending. In 2007, the company was renamed Bajaj Finance Limited and became a subsidiary of Bajaj Finserv Limited, the holding company of the Bajaj group’s various financial services businesses.
Bajaj Finance’s business model is based on providing a range of financial products and services to customers across various segments. The company’s offerings include personal loans, home loans, business loans, EMI cards, credit cards, and insurance products. Bajaj Finance has a diversified customer base, including salaried individuals, self-employed professionals, small businesses, and large corporates.
Bajaj Finance has been delivering strong financial performance over the years. The company’s assets under management (AUM) have grown at a compounded annual growth rate (CAGR) of 35% over the last five years. In FY21, Bajaj Finance reported a consolidated net profit of Rs 4,430 crore, up 11% YoY, and a consolidated AUM of Rs 1.64 lakh crore, up 5% YoY.
Factors Contributing to Success
There are several factors that have contributed to Bajaj Finance’s success:
Bajaj Finance has been at the forefront of innovation in the NBFC space. The company has introduced several new products and services, such as EMI cards, digital wallets, and online marketplaces. Bajaj Finance has also leveraged technology to enhance its customer experience, such as offering instant loan approvals and digital repayments.
Bajaj Finance has always focused on customer-centricity, which has helped it build a loyal customer base. The company offers customized financial solutions based on the needs of its customers and provides prompt and efficient service. Bajaj Finance has also invested in building a strong digital presence, which has made it easier for customers to access its products and services.
Strong Distribution Network
Bajaj Finance has a strong distribution network, with a presence in over 2,500 cities and towns in India. The company has partnerships with over 1 lakh retail outlets, including dealerships, retail stores, and e-commerce platforms. Bajaj Finance has also invested in building a strong direct sales team, which has helped it reach out to customers in remote locations.
Sound Risk Management Practices
Bajaj Finance has sound risk management practices in place, which has helped it maintain a healthy loan book. The company has a robust credit appraisal process, which ensures that only creditworthy borrowers are given loans. Bajaj Finance also has a diversified portfolio, which helps it mitigate risks.
Bajaj Finance has emerged as a leading NBFC in India, thanks to its focus on innovation, customer-centricity, strong distribution network, and sound risk management practices. The company has been delivering strong financial performance and is well-positioned to capitalize on the growth opportunities in the Indian financial services sector.