Future group enters consumer finance

The Kishore Biyani-promoted Future group, known for its retail chains Big Bazaar and Food Bazaar, today entered the growing segment of consumer finance by launching its consumer finance outfit called Future Money.

The new company, which will fall under Future Capital Holdings, will initially provide credit up to 70-80 per cent of the cost of purchases made by customers at Future group’s retail stores. It will later consider extending its services to retail outlets owned by others, providing home and car loans, and floating credit cards. The venture will be headed by Rakesh Makkar, who was earlier with Citifinancial.

“Right now there is a complete disconnect between financing and consumption. Future Money is aiming at converging that. After all a retailer is interested in selling goods and by providing financing, we can perhaps increase sale of items like furniture and consumer electronics,” said a senior executive of Future Money.

Makkar said he was not concerned with the increasing cost of money. “It is increasing for everyone, not just us. In fact, we are looking at offering competitive lending rates,” he said. Big Bazaar, Future group’s format of hypermarkets, has an arrangement with ICICI Bank for co-branded credit cards. This relationship will continue as of now.

Reliance Retail and Bharti Retail are also planning in-house credit arms to support their retail ventures. “We will enjoy at least a three-year headstart. It is not easy to set up well-penetrated credit facilities,” said a senior executive of Future Money.

As Future Capital Holdings has the status of a non-banking finance company, Future Money need not apply for it.