"Magma straddles the entire customer segment from the first-time buyer to the strategic segment. Our ticket sizes range from Rs 16 lakh for a backhoe loader to Rs 20 crore to a strategic customer," says Sumit Mukherjee, Vice President, Magma Fincorp, while sharing his views with Equipment India. Excerpts from the interview.What is the total size and value of the market, including new, imported, and used equipment? In our estimate, standard assets segments like backhoes, excavators, tippers, cranes, and compactors constitute Rs 17,000 crore and non-standard and imported assets are another Rs 8,000 crore; a total market size of Rs 25,000 crore. However, paucity of information on the non-standard assets, imported assets and tippers make these figures, at best, an educated guesstimate.Tell us about the scope and potential of leasing as a mode of asset creation.As of now, Magma does not do any leasing. The potential is limited as in India operating leases have not taken off and the hire purchase/loans being given today are effective substitutes for financial leases without the additional complications that leases bring in.What is the loan disbursal in the first quarter compared to first quarter in 2010?The overall disbursement in the first quarter of 2011 stood at Rs 1,422 crore, a growth of 36 per cent compared to the corresponding period of the last financial year. We plan to have a growth of 50 per cent in our overall disbursements this fiscal compared to the last financial year.How do you address the customer management issues taking into account the majority of them are first- timers?Magma has a evolved distribution and collection infrastructure which is evolved to address precisely this segment. For example, Magma has 172 branches of which a majority of branches are in the semi-urban and rural markets. We have CE sales team members who are into customer acquisition. On the collection side, we have a separate team which enables us to reach into every nook and cranny for the purpose of reaching our customers.What is the present scenario of second-sale financing?The seconds market is at a nascent stage and will take some time to develop. We finance unregistered assets in a limited manner as it is difficult to establish our lien or establish the actual ownership. We give low LTV of 50 per cent to cover for incorrect and improper valuation.Tell us about the financing scenario of imported machinery.Imported equipment are specialised assets such as crushers, batching plants, hotmix plants, pavers and cranes. These assets are procured by strategic customers who are large corporates. For such customers, the risk is cash flow-based and hence we finance such assets based on the customer profile.Is an imbalance in the supply and demand equation at the bottom of the pyramid?On the equipment side, there is no demand-supply gap; in fact, most manufacturers have ramped up their manufacturing capacities to meet higher demands. On the financing side as well, I see no gap. For example, Mgma does 80 per cent of its lending to the retail segment of which 50 per cent are first-time buyers.What makes Magma Fincorp stand apart, in terms of its core strengths and competencies?Magma straddles the entire customer segment from the first-time buyer to the strategic segment. Our ticket sizes range from Rs 16 lakh for a backhoe loader to Rs 20 crore to a strategic customer. Our distribution is through 172 branches, a majority of which are located in rural and semi-urban locations. Our customers are addressed through our in-house sales team. Customer service issues are handled by the in-house collection team.What does the future look like?Given the current interest rate regime, we need to wait and watch how the market reacts. The picture will be clear by September and October as to how the market has reacted and responded to the successive rate increases. In the medium term and long term, the CE market should grow between ranges of 15 to 20 per cent.