According to reports, solar winds have apparently started blowing across non-bank financiers too, if the example of the Shriram City Union Finance is something to go by.
The company, part of the Chennai-based Shriram group and a leading NBFC that specialises in consumer loans and small-ticket working capital to small businesses, is now keen to find rooftop solar power projects. A senior SCUF official said the company is “yet to disburse the first loan”, but confirmed the intention to develop solar as a new vertical.
SCUF’s clientele includes some 400,000 small businesses that used to get their working capital requirements from the chit funds operated by the Shriram group.
For a variety of reasons, the chits business is on the wane and SCUF began taking over the area vacated by the chits. Now, the company is telling at least the larger of these small businesses that ‘solar’ is a viable alternative to other sources of energy such as diesel and asking them if they want loans. After all, the official pointed out, if businesses can lower energy costs, their ability to repay other loans only goes up.
While the Shriram group appears to have taken a lead in this (SCUF had a stall at the recent Renergy conference in Coimbatore), there is evidence that other non-banking finance companies are looking at funding solar rooftop projects.
For instance, Sundaram Finance — whose hallmark is conservatism — says it is “not averse” to funding solar rooftops. The company says it recognises that “there are challenges”, such as getting subsidies from the government, but “that should not put us off.”