SK Finance has a diverse product portfolio, primarily operating in two key business segments: vehicle financing and MSME (Micro, Small & Medium Enterprises) financing.
Vehicle Financing
- Types of Vehicle Loans: SK Finance provides loans for both used and new vehicles. This includes commercial vehicles (CVs), cars, tractors and two-wheelers. The company is one of the largest financiers of used vehicles in the country.
- Commercial Vehicles (excluding M&HCVs): Predominantly finances used commercial vehicles for intra-city or last-mile connectivity in transporting goods or passengers.
- Ticket size: Approximately ₹4.6 lac.
- Tenor: Around 43 months.
- Average LTV (Loan-to-Value): Approximately 82%.
- Blended yield: 18.20%.
- Cars: Finances passenger vehicles.
- Ticket size: Approximately ₹4.1 lac.
- Tenor: Around 45 months.
- Average LTV: Approximately 78%.
- Blended yield: 16.88%.
- Tractors: Finances tractors.
- Ticket size: Approximately ₹3.4 lac.
- Tenor: Around 41 months.
- Average LTV: Approximately 82%.
- Blended yield: 20.05%.
- Two-Wheelers: Finances new two-wheelers.
- Ticket size: Approximately ₹0.7 lac.
- Tenor: Around 27 months.
- Average LTV: Approximately 81%.
- Blended yield: 21.55%. *Used vehicle finance share of 77.41% as part of vehicle financing portfolio.
MSME Financing
- Business Loans: Provides business loans to micro, small, and medium enterprises (MSMEs).
- Ticket size: Approximately ₹3.8 lakh.
- Tenor: Around 72 months.
- Average LTV: Approximately 31%.
- Blended yield: 20%.
- The MSME segment has become a significant portion of SK Finance’s overall business.
- SK Finance leverages its experience in vehicle financing to underwrite MSME customers, considering similar socio-economic conditions.
Other Loans
- Home Renovation Loans: SK Finance also provides home renovation and mortgage loans. *Small Ticket Personal Loan, Trade Advance.
Key Characteristics of the Portfolio
- Secured Lending: The vehicle and MSME portfolio is fully secured.
- Target Customers: Focuses on retail customers who are often unbanked and underbanked, primarily in rural and semi-urban India.
- Primarily finances income-generating activities.
- Underwriting: The company’s underwriting process revolves around three critical pillars: income, intent, and insurance (the 3 I’s).
AUM (Assets Under Management) Mix (as of March 2024)
- CV (Commercial Vehicles): 42.36%
- Car: 19.34%
- Tractor: 13.25%
- Two-Wheeler: 2.19%
- SME: 20.34%
- Others: 2.52%
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13 Nov 4:01 p.m.
