Date:22/02/2006 URL: http://www.thehindubusinessline.com/2006/02/22/stories/2006022203490800.htm

Back Pantaloon plans micro-financing schemes to woo more customers

Purvita Chatterjee

Mumbai , Feb. 21

CLOSE on the heels of announcing its plans to launch a non-banking finance company, Pantaloon Retail has decided to target the bottom of the socio-economic pyramid with a new micro financing project.

Mr Kishore Biyani, Managing Director, Pantaloon Retail, said: "We are working on a model to service the bottom of the socio-economic pyramid. This would be based on micro financing whereby we will be giving money to our lower-end consumers to make them spend at our stores.''

Having created sub-brands in its retailing pyramid to go down the price value chain with brands such as Big Bazaar and Food Bazaar, the retailing major is now targeting the lower socio-economic groups with micro financing schemes to lure them into buying goods from its stores.

Mr Biyani further adds, "The model is based on giving money to make consumers spend at our stores and in the process we also want to make some money ourselves.'' Doling out statistics to depict lack of savings in the lower strata of society, Mr Biyani, claims, "Today almost 55 per cent of the population does not have a bank balance. Through our micro financing schemes we would be creating awareness amongst this section of the population.''

At the same time, the retail company would ensure that the customers are `bankable' while lending to them. As Mr Biyani states, "We would be looking at credit worthiness of the individuals before lending to them.'' "The whole purpose is to recover some money in the process,'' adds Mr Biyani.

Tapping into almost all aspects of retailing, the Rs 1,100-crore retailing company has ventured into areas such as fashion, food, general merchandise, home and leisure, entertainment, wellness, e-tailing and finance. "We have been serving the value and lifestyle seekers and at the moment we are still not serving the bottom of the society, added Mr Biyani.

On exploring new retail formats, Mr Biyani adds, "With a new India emerging we have realised there have to be new formats of retailing. One size is not expected to fit all.''

Creating more retail formats such as the recently introduced Central, a seamless mall, the retailing company intends taking its mall brand to more cities. The mall has recorded a turnover in excess of Rs 400 crore, according to Mr Biyani.

Comparing his business to the FMCG business, Mr Biyani feels retailing is all about segmentation. "Retailing is like selling soaps and is basically segmentation,'' he adds.