NBFCs have developed substantial expertise in lending to this industry and hence, enjoy an equal share in the pie, says KV Srinivasan, Chief Executive Officer, Reliance Capital while discussing CE financing segment with Equipment India. Excerpts from the interview.What is the performance of the last quarter and how do you look at the future?The numbers have been largely flat with a marginal growth of over ten per cent; however, the future quarters promise buoyancy.What are the growth drivers?Certain manufacturers work on a calendar year concept and for them the quarter of Oct - Dec is the last quarter and hence, there is an inherent push from their side to increase both off-take and retail sales. There are lucrative schemes on offer by these manufacturers. Also since the demand in quarter July - Sept is subdued due to monsoons, buyers wait for the period to get over and plan purchases in the Oct - Dec quarter . We also expect to see buoyancy since there are budgetary payments which government departments have to clear before the end of the financial year.The year 2008-2009, in general saw a dip in asset build-up, and there was also a situation where the NBFCs were forced to put control on mounting delinquency levels. What is the scenario now?Fortunately for us, our CE book has always been very stable. Yes, we did maintain caution in new customer acquisition during this period but that was more on account of external reasons. As far as sale of repossessed equipment is concerned, we have tie-ups with various e-auction sites to realise better resale. Also, we have a network of brokers. Our in-house sales team also assists in liquidating the repo stock to any of our interested existing customers. However, repossession is the last resort that we adopt; the emphasis is more on counselling and collecting the dues. There is no substitute for prudent lending.What makes Reliance Capital stand apart in terms of your core strengths and competencies?The biggest strength at Reliance Consumer Finance is our customer- centric approach. We constantly work on designing our finance schemes to suit all segments of industry. We offer utmost flexibility and transparency to our clients. With one of the best processes, turnaround time in industry and an efficient team and distribution in place, we are able to maintain the highest customer retention and acquisition. Our product portfolio has been of very good quality.Brief us about your portfolio pertaining to financing construction equipment.As the initial thrust was on large corporate, our CE book majorly consists of strategic clients. Almost 70 per cent of CE receivables are from large EPCs and mid-sized contractors; the balance would be from small contractors and captive users. We are also increasing focus on retail customers.What is your market share and future plans?Within three years of operation, we are today at an approximately 6-7 per cent market share in commercial vehicles and 3-4 per cent in construction equipment market in the locations where we are present.How do you look at the competition?To succeed in this industry, it is imperative to understand the business cycle of the customers. During monsoons, the business activity is slow. Also in most of the cases, the paying authority is the government where the bill payments are a little less predictable. These affect the repayment ability of the client. So you need to be with the customer and assist him manage these cycles. NBFCs have developed expertise in hand- holding and accommodating the customer in trying times. You need to be patient to succeed in this business. We believe we have developed the necessary skills to acquire a strong market share in this segment.Which segment is the main demand- driver? Are there any specific reasons?In our opinion, the road construction and the mining sector will be driving the demand more since these sectors are driven by the need for investments in these sectors. India also needs substantial investments in the power sector and ports.There is a view that NBFCs do not enjoy a level playing field. What is your take on this? The NBFC disadvantage can be attributed to the higher cost of funds and this is applicable in any product where they compete with banks. However, NBFC's have developed substantial expertise in lending to this industry and hence enjoy an equal share in the pie. Another disadvantage the NBFCs have is the non-fund based products like bank guarantees which large contractors require for bidding / execution of projects. NBFCs are not authorised to issue bank guarantees or letters of credit.