"The main vehicle for leasing in India are the NBFCs, but these financing entities do not enjoy a level playing field vis-à-vis banks. For example, in terms of NPA allowance and recovery of bad assets, banks have a clear advantage over NBFCs," says DK Vyas, Chief Executive Officer, Srei BNP Paribas. In an exclusive chat with Equipment India, Vyas throws light on the present status of CE financing segment. Excerpts from the interview.What is the loan disbursal in the first quarter compared to first quarter in 2010, and how do you view the growth prospects?Srei BNP financed equipment over Rs 5,000 crore in Q1FY12, almost a two-fold rise over the corresponding figure (Rs 2,101 crore) for Q1FY11. The demand for new and old equipment has been very robust and we have seen the first quarter numbers to be high traditionally as well. However, given the interest rate scenario, we see the growth moderating as we go along. We expect there will be substantial improvement by the fourth quarter.How do you address the 'customer management issues' taken into account the majority of them is first- timers (SMEs)?With SMEs being the majority of our customers and a large percentage of them being First Times Users (FTUs), we have to do a lot of hand-holding. We cannot restrict our role to just that of a financier, we take on the role of an asset manager. Our services span the entire value chain in infrastructure, and at Srei BNP we cater to the entire value chain from procurement to disposal. Srei BNP acts as a guide to its retail clients by advising them on what kind of asset would be ideal for the projects that they have undertaken. The right advice in making the correct choice of assets and the ideal tenure of financing work wonders for most clients. Srei BNP's unique customer proposition has comprised acquisition, deployment and exit.Acquisition: It provides customers with in-depth knowledge on products, use and project suitability. It empowers customers through loans, operating leases and exchange offers, rentals, among others.Deployment: It provides continuous asset deployment options across existing or new projects, minimising asset idling. Coverage of asset risk through provision of insurance is another value-addition.Disposal/exit: We have a joint venture with Go Industry - the world-wide auctioneer/valuer and provide customers with multiple exit options.With such rich guidance and service bouquet, our value proposition towards our customers is much beyond finance. This has, over the years, facilitated in building a strong customer loyalty which is reflected in the fact that 70 per cent of our financing is to repeat customers.Do you think there is an imbalance in supply and demand equation at the bottom of the pyramid?In infrastructure projects, the big developers usually sub-contract part of their work to entrepreneurs who provide services like construction, transportation etc. Such small and medium players are scattered throughout the length and breadth of the country. Thus, the bottom of the pyramid is indeed a broad one. However, they do not enjoy access to institutional financing (like banks). Thus, it is the NBFCs which cater to the credit needs of such players. The NBFCs have grass-root knowledge of the credit needs of these players and have a fair idea of their capability. NBFCs take a call on extending credit to these players based on the likely cash flow these players can generate using the financed asset. Credit intermediation has been the most preferred route for credit expansion and NBFCs have played this role for the past 30 odd years to near perfection. And NBFCs' decision-making process is also much faster vis-à-vis banks.Thus, NBFCs have a big role to play in rectifying the demand-supply imbalance at the bottom of the pyramid. RBI is also playing a constructive role by re-classifying the various categories of NBFCs so that all NBFCs do not operate under a blanket regulatory framework. This is the right approach by RBI to acknowledge the contribution of NBFCs like the Asset Finance Companies (AFCs) and the Infrastructure Finance Companies (IFCs) to the process of nation-building. However, as I have already mentioned before, NBFCs like AFCs and IFCs need a level playing field vis-à-vis banks in order to perform their duties better.Tell us about the financing scenario of imported machinery.The penetration of financing in imported equipment is equally high and almost over 90 per cent is financed directly. Imported equipment is financed in a similar way to domestic equipment, except, of course, that the documentation procedure is relatively high. Since we have been in this business for a long period, the processes are rather smooth and we offer our services in a seamless way, such that the customer does not feel much difference. The suppliers also contribute to ensure that customers get their equipment hassle-free.