/Economics

Mahindra War Room 2014

Financial Services Business Caselet

MAHINDRA FINANCE SECTOR FINANCIAL SERVICES BUSINESS CASELET Mahindra Financial Services Sector offers a range of financial products and services to the under-served customers in rural and semi-urban India. Mahindra Finance is fabled as a success story in rural penetration and poverty reduction through financial inclusion. BUSINESS BACKGROUND Mahindra & Mahindra Financial Services Limited (MMFSL) is one of India’s leading Non-Banking Finance Companies providing personalized finance for a wide range of utility vehicles, tractors and cars focusing on the rural and semi-urban sector. MMFSL’s rural financing is considered as the cornerstone of poverty reduction, rural development and inclusive growth in many parts of the country. MMFSL has extended loans to over 2 million customers across 170,000 villages belonging to low income groups, helping rural India surge ahead. Mahindra Finance envisions to be the preferred provider of retail financing services in the rural and semi-urban areas of India, by providing the complete range of financial products and services to customers through the nationwide distribution network. MMFSL’s unique ability is to successfully develop consumer segments that are hitherto untapped, even remaining outside the purview of the formal banking system - a classic example of Mahindra Rise Philosophy. MMFSL’s unique business model is socially inclusive and focused at the bottom of the income or social pyramids. MMFSL fulfils the gap in the financial system by a unique ‘Earn & Pay’ business model. It provides loans not for consumption, but for income generation, be it tractors for better farming or haulage applications, vehicles used for transportation etc. While serving these customers, MMFSL realized the potential for key adjacencies, viz. Insurance and Housing Finance. Accordingly, two subsidiaries were set up - Mahindra Insurance Brokers Ltd. (MIBL) and Mahindra Rural Housing...