Hero Cycles Ltd, the world’s largest manufacturer of bicycles, is tying up with financial institutions in several parts of the country as part of a first of its kind initiative to provide loans to people of the weaker sections, enabling them to buy bicycles.
The initiative has been launched as a pilot project in Maharashtra and Gujarat where Hero Cycles Ltd has entered into a strategic tie up with Fullerton India, a non banking financial institution (NBFC) engaged in the business of finance in rural and urban areas. The institution provides finance to all eligible customers and even 100% funding is also made available at competitive interest rates.
While the micro-finance project has been kick started in Maharashtra and Gujarat, it will soon be extended to other states as well. The company is in the process of scaling up the initiative and by the next month the finance facility will also be made available in Andhra Pradesh, Karnataka, Rajasthan, Tamil Nadu and Madhya Pradesh.
“On the face of it, a bicycle may appear to be quite an affordable commodity. However, in a country like India where millions of people still live on less than a dollar a day, buying a bicycle can be a difficult task. Moreover, while banks provide loan facilities to buy cars to middle class buyers, hardly any financial institutions do so to help lower income people get bicycles,” said Mr Pankaj Munjal, Managing Director and Co Chairman, Hero Cycles Ltd.
“We earnestly believe that bicycles need to be made available to each and every person in India. They should be considered an extension of our basic needs of ‘roti, kapra, aur makaan’. A deep penetration of bicycles will in many ways change the lives of millions of people and even increase our productivity,” he adds.
Under the tie up, the financial institutions also partner with Hero Cycles Ltd in promoting the Hero Cycles brand in their respective territories.
Hero Cycles is also in the process of identifying new institutions who are willing and able to provide finance to weaker sections of the society and facilitate the purchase of cycles through loan mechanism. The company is also in touch with NGO’s who can create self help groups, enabling their members to collectively finance and buy cycles, while standing as guarantee for each other.