Bajaj Finance is setting ambitious goals for the next five years, aiming to capture a 4-5% share in the retail credit market as it expands its operations. Anup Saha, the company’s managing director-designate, shared insights on the organization’s growth strategy during a recent interview, emphasizing a shift towards becoming a Fin-AI company.

Growth Ambitions and Customer Base Expansion

Bajaj Finance has seen impressive growth in its customer base, reaching 97.12 million in the third quarter, and is on track to surpass the 100 million mark by FY25. Saha expressed that the company aims to connect with 200 million consumers, targeting a 3-4% stake in total credit and 4-5% in the retail segment.

• Target Customer Base: 200 million by FY25
• Projected Market Share: 3-4% in total credit, 4-5% in retail credit

To achieve these goals, Bajaj Finance is focusing on organic growth and forming strategic alliances. A notable partnership with Bharti Airtel will enable the distribution of Bajaj Finance products through the Airtel Thanks App, enhancing digital financial inclusion.

Innovative Technology and New Business Lines

Transitioning to its BFL 3.0 model, Bajaj Finance will leverage AI-enabled technology to optimize operations and drive growth. The new lines of business, including car financing, gold loans, and microfinance, are already contributing nearly 3% to the company’s Assets Under Management (AUM) growth.

• New Business Initiatives:
  • Car Financing
  • Gold Loans
  • Microfinance
  • Tractor Finance
  • Commercial Vehicle Finance

Bajaj Finance is also venturing into green financing, recently launching products that support solar and electric vehicle financing for retail and MSME customers. These efforts are expected to yield profitability and operational efficiencies starting next year.

Risk Management and Portfolio Stability

Focusing on risk management, Bajaj Finance is adjusting its asset mix to prioritize secured loans, which are anticipated to grow at a faster rate than unsecured loans. The company’s net non-performing assets (NNPA) stand at a low 0.48%, reflecting strong risk management practices. Saha noted that the firm consistently monitors its portfolios and fine-tunes its underwriting processes to mitigate risks effectively.

• Key Performance Indicators:
  • NNPA: 0.48%
  • Focus on secured loan growth

Expanding MSME Opportunities

The MSME sector represents a significant growth opportunity for Bajaj Finance. The company is exploring various options to tap into the micro-enterprise segment, which could become a substantial driver of growth in the coming years.

Future Financial Strategies

Fee income remains a vital component of Bajaj Finance’s revenue stream. The company anticipates steady income from cross-selling initiatives and its omni-channel network while also identifying new avenues for enhancement.

Harnessing AI for Business Efficiency

The integration of Generative AI is pivotal to Bajaj Finance’s transformation into a Fin-AI company. Saha highlighted that AI would be a cornerstone in streamlining operations, improving customer engagement, and driving revenue growth. The company has already implemented various AI applications over the past two years and plans to expand this technology across all business functions.

In summary, Bajaj Finance is poised for substantial growth and innovation over the next five years, driven by strategic partnerships, advanced technology, and a focus on risk management. With a clear roadmap, the company aims to solidify its position in the financial services sector while enhancing customer experience and operational efficiency.