Home Credit India Finance Pvt. Ltd., one of India’s fastest growing non-banking finance company, has been assigned an IND A−/Stable rating from India Ratings and Research Pvt Ltd., a Fitch Group company. Separately, the rating has been upgraded by CARE Ratings to A- from BBB+. The new rating is based on factors like experienced management team, comfortable capitalization and liquidity, adequate risk monitoring & appraisal systems, unique business model, high focus on Indian market, cost efficient point of sale network and continuous support by Home Credit Group.
According to India Ratings, one of the key rating drivers is India being a high potential market in Asia for Home Credit Group. “India offers a large population with high mobile penetration and low competition in financing low-ticket unsecured consumer durables segment. Based on the credit history available, the company leverages the credit life cycle of existing customers by providing cross-sell personal loans,” the rating agency said.
Noting that Home Credit India’s market share in the mobile financing segment has been rising steadily, India Ratings said this gives the consumer loans provider a competitive edge in key geographies dependent on small retail format players for mobile sales. The increasing market share along with Home Credit India’s foray into online lending further improves scalability.
In a separate note, CARE Ratings said the capitalization of Home Credit India is comfortable and is supported by continuous equity infusion from the promoters. As against the regulatory requirement of having a minimum capital adequacy ratio (CAR) of 15%, the company had CAR of 26.33% as of March 31, 2018. Highlighting adequate capitalization as an important driver, India Ratings said, “Its liquidity is adequate due to the short tenor advances extended.”
