Shriram Transport Finance

Shriram Transport Finance Company or STFC for short is a sister concern of SHRIRAM conglomerate which has been in the finance business for a very long time. Established in the year 1979, the company has been lending out finances to business houses, direct consumers, general insurance, car insurance and life insurance sector and has presence in several kinds of funds, such as mutual fund, stock broking etc.

They have approximately 1035 branch offices and 907 rural centres across India. Shriram Transport Finance Company primarily deals with financing pre-owned trucks and Small Truck Owners. It is also the largest Non-Banking Finance Company, prevailing in asset financing.

STFC has been financing the often ignored owners of small trucks since a very long time. They understood the need to finance this segment of small businesses as they understood the importance of small businesses in the country. They realised that the small truck owners with their hand to mouth earnings will not be able to meet the required credit to purchase a new truck and therefore the concept of financing the small truck owners was born.

A stated STFC is one of the largest NBFCs in India currently with pan India branches, and they finance everything that makes a small business work. Some of the loans that they offer are stated hereunder.

The heavy duty truck comes under the heavy commercial vehicles. Also known as Multi-axle vehicle, the HDT has a weight of over 16.2 tons. These vehicles are an extremely important part of the up and coming economy. They make sure that the movement of goods from one place to another continues smoothly without any delay. They are mostly used for the goods that need to be transported to places at a longer distance. Sometimes they also come in handy in the extraction and transportation of natural minerals such as iron ore and coal.

It is not possible for small businesses to purchase these heavy-duty vehicles at a down payment as they are extremely expensive. Therefore, almost all the heavy-duty vehicles deployed in this part of the economy are purchased through financing alone. As of now approximately 2 million such vehicles are on the road in the country. Shriram Transport Finance Company offers these vehicle owners an option of buying a new vehicle as well as a previously used one. This way, those looking to expand their fleets within a limited finance, can do so without worrying about where the money to buy new vehicles will come from.

Other then the heavy duty vehicles, the small business owners also use medium to light weight trucks to move around less quantity of things to close and far off places. The normal weight of these vehicles ideally ranges from five tonnes to sixteen tonnes. They are used for hauling goods in the rural and semi-urban centres, connecting them to the urban ones. It is estimated that around five million of these vehicles are currently moving on the Indian roads. Shriram Transport Finance Company offers small truck owners customised loan plans and financial solutions to purchase light duty trucks either brand new or a previously used one. They have ensured that the truck owners have enough funds to deploy these vehicles in their business. The light duty vehicles are believed to have the maximum number of ‘stand’ operators in the country.

These kind of trucks run around in almost every city on a daily basis. They are used to transfer goods from one place in the city to another in the same city, that is, for intra city transportation. They are also used for transporting goods around the adjacent cities, such as non-capital regions and other such adjoining areas. The gross weight of these vehicles is less than five tons. They are used in the last mile or short haul deliveries. The transportation industry utilises this vehicle for quick fixes and therefore it occupies the bottom end of the spectrum in the transport industry. It is estimated that about three million of these vehicles occupy the Indian roads. Around half a million out of these are three wheelers and the rest are four wheelers. Shriram Transport Finance Company assists the business owners in buying these vehicles by providing very flexible options of loans and financial solutions. Both small time operators and operators cum owners make use of these solutions. Incidentally, the small time operators and operator cum owners of the small truck are in higher concentration in this field of business, even though their vehicle occupies the lowest rung in the hierarchy of trucks.

The other kind of vehicle that comes under the purview of Shriram financing are the passenger vehicles. India is a country with one of the highest population in the world. Most of which belongs to the middle, lower middle and below poverty line of the economic scale. Therefore, one of the most common ways of transport for people is also public transport. Not all places can be travelled by a private vehicle and therefore the public transport vehicles are much sought after and also very economical. The service of transporting passengers from one place to another is catered to by vehicles ranging from multi-utility vehicles, taxis, vans, three wheelers to the deluxe buses such as Volvo and Mercedes. With approximately ten million passengers doing to and from, within and outside the city, this is perhaps one of the most potential of all the verticals in the transport industry. Therefore, financing this vertical is akin to fuelling more money in the economy. Initially Shriram Transport Finance Company functions in the principal of financing had restricted their lending to taxis only, but from the year 2010 they have also included personal car loans in their category of products. With new forms of taxi services coming up, most of the owners are putting in their personal vehicles for taxi services in order to derive some income. Therefore, Shriram Finances decided to expand their horizons and included private vehicles in the segment.

India is an agrarian society. Despite all the urbanisation, even now, approximately seventy percent of the country engages in some or the other form of agrarian work. The rural branches of Shriram finances looks into the need of these small time farmers or land owners and provide them with financial solutions pertaining to agricultural equipment. The centres helps people purchase tractors, harvesters, and several other relevant equipment which come in handy on a farm. The co-operatives and nationalised branches have been crucial in making this segment of economy five million lakh strong. Shriram Finance helps contributing by ensuring that the labour has enough resources to utilise their skills and take this agrarian economy to further heights.

The rise in population also leads to demand of houses and buildings at an equally fast pace. At the same time, a strong infrastructure is the backbone of a developing economy. The Indian government on its part has emphasised on the need of better infrastructure for the country. As a result this sector has witnessed an exponential growth in the past few years. Keeping up with the times, Shriram Transport Finance Company decided to finance the contractors for capital, both large and small companies for construction of roads, dams and bridges, which are not only significant to a healthy infrastructure but also the very fabric of the transport business achieving greater access across the nation. Finance is also available for those in the retail segment and look towards selling of heavy construction vehicles such as dumpers, diggers, cranes, tippers and other such mechanically useful construction vehicles.

Shriram Transport Finance Company was instituted with the sole aim of helping aspiring small businesses to run smoothly and without any worry of financing their business. So far the company, with its various branches has catered to over a million of satisfied customers and hopes to continue serving them in whichever way possible. They specialise in transportation vehicles related financing and are forever looking to expand horizons in the field and add more consumers to the list of beneficiaries of their financing solutions.

For Investors

Those looking to invest in stocks can also look for Shriram Transport Finance Company on the Stock exchange list. The company is open to selling stocks to interested investors. Since it is an NBFC, the chances of getting profit on these stocks are quite high. So, one can always consider investing in STFC for better returns on their investments.