Godrej capital plans foray into supply chain finance

April 21, 2023

Godrej Capital, the NBFC arm of the Godrej Group, is preparing to foray into micro credit and supply chain finance in order to diversify its lending book, according to MD and CEO, Manish Shah.

“We started with home loans, we moved to LAP. Last month, we launched unsecured loans, which are business loans. Later this year, we want to look at micro LAP, which is micro secured, but much more real, the heart of micro in MSME, and supply chain,” Shah told businessline.

“Every year what we’ve been trying to do is establish an existing business, incubate a new one, test it, pilot it, stay beneath the radar and grow the next year,” he said.

The lender will start its supply chain business looking at Godrej Group’s agriculture business and a couple of other business areas within agriculture by collaborating with farmers, distributors and collectors, bringing in technology or partnering with someone.

While rising interest rates and slower growth in the rural economy could pose a challenge, Shah said what has helped the company is that it largely caters to the middle and upper income segment and not affordable housing.

“We haven’t seen any slowdown in the middle segment, say ₹40-60 lakh. If you see the listed developer results and our own (Godrej Properties), we have crossed ₹10,000 crore in sales for the first time (in FY23). We don’t see a slowdown in the middle and higher levels,” he said.

In this scenario, the company will benefit from a smaller size as any impact of the slowdown will be minimal given the scale, market share and the place it holds in the market. “It’s better to be our scale growing, than if we had two more zeroes in front of our book already, then sustaining the growth (would be harder).”