I made this ^ observation in Sep 2016. Good to know the EMI card franchise is doing extremely well for BFL.
This also explains why 74% of the loans come from existing customers. I am guessing a large chunk of these would be EMI card holders purchasing consumer durables. The growing EMI card franchise will also help BFL bring down the cost to income ratio, which is hovering around 40% for the past few quarters. Do you agree with me?
Trying out EMI card for myself
Eager to try out this product for myself, I decided to apply for an EMI card. Bajaj Finance takes online applications for an EMI card, and I have previously taken consumer durable loans from BFL. So it should have been an easier task. So I reached out to the customer care team and this is what I figured out:
- BFL has stopped online applications for the card.
- Even past customers can only get a card by taking a consumer durable loan at outlets like Croma, Reliance Digital, Ezone etc. (This was what the customer care team informed me)
- The EMI card comes with a fee of Rs. 412/-
per yearand a renewal fees of Rs. 117/- incase of card not utilized in the entire year.
As I don’t have any CD purchases lined up in the near future, I will have to wait for more time to try this product.
So along with repeat customers (which results in lower cost of customer acquisition and hence lower cost-to-income ratio),
the EMI card gives a recurring yearly fee based income to BFL. This fee based income will become significant as the EMI card franchise grows (currently 15 million as revealed by the MD during the AGM)
IMPORTANT EDIT: I may have been mistaken about the recurring fee based income. The EMI card has a one time payment of Rs 412. You only need to pay Rs 117 if the card has not been used in the past 1 year. My bad, sorry I got over excited
Does anyone else have an EMI card. Can you post your experience (positive/negative) using this card?