Finance minister Jim Flaherty keeps close eye on long-term car financing
Driving efficiency is a high priority for CFOs who want to outsource F&A processes, according to an Ovum study of 150 large companies in the United States, United Kingdom and Canada. Most survey respondents saw the main strategic aim of the accounting department as delivering efficiencies, whether that is within the department itself or across the company as a whole. This is a wider trend in outsourcing as a whole, Thomas explains. Cost reductions are the table stakes, and companies want to know what else their outsourcers can do to make their processes and technology run more efficiently. The most commonly outsourced services within accounting are payroll accounting, accounts payable, and accounts receivable.
Muthoot Finance: Can turn 2,000 gold-loan outlets into bank branches
With 74 years in gold financing, the company has over 4,200 gold loan outlets across 21 states and four Union territories, and employee strength of over 25,000 with a gold loan portfolio over Rs 26,000 crore as of last fiscal. “With our last mile connect in to the hinterland, a banking licence will enable us to play a larger role of financial inclusion by taking these services to the unbanked and undeserved population of the country,” Muthoot further said, adding that around 60 per cent his existing branch network is spread across tier 2, 3 and 4 markets. On whether the company will continue with the gold loan business if it gets a banking licence, he said there is no question of shutting that down as there is no regulatory requirement to shut down the existing business. About meeting the funds requirement for the banking foray, he said arranging Rs 500 crore, which is the RBI prescribed net-worth for bank holding company, will not be difficult. Muthoot Finance and 25 other companies, including Tatas, Reliance, Birla and India Post, have applied for bank license.
This will also strengthen partnership between public and private sectors, he said. The additional finance provided by Samba would help Saudis build houses that cost more than SR 500,000, the maximum value of loan given by REDF, he pointed out. Al-Eissa said Sambas agreement with REDF reflects its desire to expand its financing programs through channels having developmental dimensions, adding that it would serve the interest of the Kingdom and its people. The banks additional housing finance scheme was designed with a long-term vision and offers added value to the banks customers. It also goes in line with Sambas efforts to enable citizens to own their houses following easy methods, Al-Eissa said.
Samba-REDF deal to finance housing projects
Just before the financial crisis hit in 2008, nearly half of Canadian new vehicle sales were leases, he said. But the market quickly dried up because automobile manufacturers couldnat secure the capital to finance the leases. The longer financing terms essentially allow Canadian car buyers to have a similar, lower monthly payment to when they leased a vehicle, he said, although they would now own the vehicle at the end of the term. For the auto industry, the net effect is also largely unknown because the switch to longer terms is a fairly new phenomenon, he added.