Margadarsi Chits in Tamil Nadu (TN)

MARGADARSI Chit Fund Ltd, belonging to the `Eenadu' newspaper group and essentially focussed on Andhra Pradesh, has chalked out a plan to widen its branch network to reach 25 branches in Tamil Nadu in the next five years.

It has also planned to open its own portal to provide information about its chit operations in Andhra and Tamil Nadu, according to Ms. Sailaja Kiron, Managing Director of Margadarsi Chit Fund Ltd.

Speaking to newspersons here on the occasion of the opening of its Coimbatore branch, the fourth in Tamil Nadu and first outside Chennai, she said the recent uptrend in the collection of mutual funds has not made any dent on the growth of her own company.

Ms. Kiron said in the first 11 months of the current financial year, her company's turnover had crossed Rs. 1,000 crores in Andra Pradesh whereas the three branches in Chennai city had contributed about Rs. 50 crores. The turnover reflected the improvement in the economic situation.

She said barring the three branches in Chennai, the other 51 Margadarsi branches were located in AP and the 55th branch was opened here. The turnover of the new branch was Rs. 10 crores.

Ms. Kiron said the growth of Margadarsi Chit Fund (Madras) Ltd in Tamil Nadu may look a little too slow since it had opened only four branches (including Coimbatore) in the last six years. But the company wanted to lay a strong foundation and did not believe in growth for growth's sake. It was for this reason the company did not go for any prize schemes to entice new customers.

Dwelling on the growth plans for Tamil Nadu, she said initially, the company wanted to open branches in big towns such as Madurai, Salem, and Erode before reaching out to smaller towns. The plan was to establish a branch network of 25 branches in the next five years in the State.

She said the financial sector was set to witness the entry of institutions such as venture capital funds which may be looking at larger borrowers. But chit funds were traditional financial sources that offered options of saving and borrowing.

Ms. Kiron said a large chunk of the subscriber contributions was used to meet payment commitments to the successful bidders in the chit schemes. The 5 per cent commission earned was kept as liquid asset to meet any contingencies and there was very little investment outside.