Foreign Lenders Support Non Banking Systems in India

The Wall Street Journal reports that global players such as KKR & Co. L.P., headquartered in New York City, and Manhattan-based Goldman Sachs are actively involved in alternative lending in India. Though the amount of the loans being offered are far smaller than those disbursed by big banks, the sector is seeing a surge in growth.

“Banks don’t like to do too-small transactions,” said D. Arul Selvan, CFO of non bank lender Cholamandalam Investment and Finance Company Limited, a Chennai-based company which reportedly has $5 billion in assets, and whose profits have increased 42 percent in the quarter that ended September 30.

Dollar Bills

“It’s a pretty attractive [business] from a risk-reward perspective,” B.V. Krishnan, an executive at KKR in India, told the Wall Street Journal. Krishnan explained that the expected yields from the loans are in the high teens and that KKR has lent roughly $4 billion to Indian companies through two non-bank lending firms it runs, reports Pymnts.com.

 

 

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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