The Industrial Financial Corporation of India Limited (IFCI) has become the first public sector Non-Banking Finance Company (NBFC) to set up its regional office here following the announcement of the capital city in the Vijayawada-Guntur region.
It will give loans above Rs. 25 crore against the minimum loan size of Rs. 50 crore to facilitate the establishment of industries around the upcoming capital. Loans of smaller size are taken up by subsidiaries of IFCI, said its Managing Director and CEO Malay Mukherjee.
Addressing members of Andhra Pradesh Chambers of Commerce and Industry Federation (APCCIF) here on Thursday, Mr. Mukherjee said IFCI had been able to register a growth of at least 20 per cent over the last few years with the help of schemes that suit the diverse requirements of its clients whereas the commercial banks did not have that flexibility in extending credit.
In spite of a base rate of 12 per cent which is higher than what the banks charge on term loans, IFCI managed to register an impressive growth mainly by sanctioning loans within one month of submission of loan applications, which was its ‘unique selling proposition’.
Besides, the good quality of project appraisals and smooth rendering of other services stood IFCI in good stead. Mr. Mukherjee pointed out that IFCI came into existence as a Development Finance Institution (DFI) along with ICICI and IDBI through an Act of Parliament. Subsequently, ICICI and IDBI got converted into banks and grew faster than their peer (IFCI) which chose to be a NBFC, a strategy that carved out a niche for it in project financing.
With the Government of India holding 51 per cent share and the rest accounted by mutual funds, foreign institutional institutions, PSU banks and individuals, IFCI surged ahead by leveraging its strengths while being wary of the market vagaries.
