How is Shriram Finance positioned to leverage India’s strong economic growth? Post covid, India’s financial discipline has helped the economy to grow at around 7 per cent year on year. This stability has helped Shriram Finance too. We are seeing good credit offtake both in urban and rural areas. Surprisingly, rural growth has been good for the last four years. Good rains and good agricultural output have helped our business as it is mostly focused on semi-urban and rural areas. At the same time in the Shriram Group, we merged two companies – one focussing on vehicle financing and other one focussing on small and medium enterprises financing and gold loans. Now we have a larger product offering for customers.
In public transportation, the landscape has shifted post-GST, with several state governments reducing expenditure in this area. As a result, private players, especially in tourist destinations are playing a larger role in operating buses, cars, and vans for mass transport. This has created steady demand from private operators, a segment where we are seeing healthy financing growth.
Electric vehicles are also gradually gaining traction. Over the next two to three years, adoption is expected to rise, particularly in three-wheelers four-wheelers and city-based transportation where charging infrastructure is developing. Looking ahead in five to ten years, EVs could dominate public transportation, supported by stronger infrastructure and government support.
Gold loan is one segment which has done well. How is Shriram Finance looking at the opportunity?
It is a great opportunity and we have a large infrastructure of nearly 3250 branches and over 40 million customers. We are also upgrading few more branches and with all these I think we will play a very important role in gold loans and very soon our portfolio will become much bigger. Competition is heavy and the existing gold loan companies have done very well in creating awareness to the customers. That trend will continue and customers would prefer to go to known places rather than unknown places for gold loans. So, we are trying to make customers remember Shriram offers a gold loan and are confident of increasing our portfolio very soon.
NBFC as a sector has been in limelight and it has done well when compared to banks. Do you think the trend will continue?
Historically, the credit growth in banking sector has never been more than 13-14 per cent. On average, it grows around 11 to 12 per cent year on year. But, our economy’s credit growth requirement is somewhere between 17-18 per cent. So, if banks are not able to grow, then automatically more business will come to NBFCs giving it a growth rate of around 20 per cent. And I think that will continue to remain. The advantage for NBFCs is: one because banks are not able to grow very fast. The second factor is nimble footedness of NBFCs and customisation and investment on the core IT digital platforms are all going to be extremely positive for NBFCs. INDUSTRIAL ECONOMIST MARCH 2026 33
Do you believe the uncertainty face by MSMEs will ease with the finalisation of the EU trade deal positive progress around US tariffs?
I think MSMEs are likely to do very well and expect it to grow much faster than other segments, because their credit deficiency is around Rs 40 lakh crore as per the RBI’s estimation. And that has to come naturally from the NBFCs because of their reach. MSMEs were forced to look into other markets like Middle East countries, European and Asian markets due to the tariffs. And I think it will be an advantage for India because now our people are willing to look into newer markets for growth.
Is the MUFG deal progressing as per expectations?
It is progressing well. The RBI has already said the deal can go ahead and we need approval from the Competition Commission of India. it is obtained we would proceed with board seats and other things. Once the deal is done, we need not worry about our capital planning. Our focus would be on growth and quality. We are definitely looking for a big growth push for Shriram Finance, because the cost of borrowing is likely to come down and already some rating agencies have upgraded our ratings. Once the money comes in, other rating agencies will give a positive upgrade and that will help us to reduce our borrowing cost substantially. It will make a big difference for us, in terms of the way we deal with the customers and our offerings and that will help us to grow much faster.