Shriram Finance is India’s largest retail asset-backed lender, built over four decades to serve the “perceived undeserved” - the small road transport operator and first-time entrepreneur that formal banking passed over. It began in 1979 financing pre-owned trucks in semi-urban corridors, and in FY23 merged with its group’s consumer-finance and capital arms to become a single, diversified NBFC spanning vehicles, business loans, and deposits, before bringing in MUFG Bank as a 20% strategic partner in 2026. The recurring approach is proximity-led lending: a branch in the community, a relationship with the borrower, and a valuation skill set that turns assets other lenders won’t touch into bankable collateral.
Business segments
Five lending engines, all secured against physical assets - a commercial-vehicle cash cow that invented the model, two vehicle-finance platforms that scaled it to cars and two-wheelers, an MSME book that finances the ecosystem around those vehicles, and a green-finance bet under construction - funded by a deposit franchise that keeps the cost of money low.
1. Commercial vehicle finance: the founding engine and the group’s largest loan book
It finances pre-owned trucks for small road-transport operators who are owner-cum-drivers, using a relationship-based model that values the person and the vehicle more than a credit score.
- The borrower is the moat - roughly 60% of customers are repeat borrowers, and the rest come through their referrals, so the company acquires customers without advertising and underwrites them based on four decades of shared history rather than just paperwork.
- It lends where banks won’t - 55-60% of the second-hand truck financing market is held by unorganised money lenders charging high rates; the company offers cheaper, structured finance and has institutionalised the valuation of vehicles up to 10 years old, a skill few formal lenders possess.
- Every loan is guaranteed by a peer - the entire portfolio is backed by a guarantee from an existing customer or someone in the commercial-vehicle industry, which aligns incentives and keeps credit costs at 1.68% of total assets.
- It finances the whole trucking life - beyond the vehicle itself, the company offers tyre loans, fuel loans, repair and maintenance loans, and challan loans, so the borrower’s entire operating cycle stays within the relationship.
2. Passenger vehicle finance: the car-loan book that rides the same branch network
It finances new and used cars through the same 3,225-branch network that serves truck operators, with OEM partnerships layered on top to capture showroom traffic.
- A branch in every market - the company operates across 31 states and union territories, with 535 rural centres, so a car loan can be originated and serviced in towns where national banks have thin presence.
- OEM tie-ups feed the pipeline - reinforced partnerships with car manufacturers mean dealers can offer financing at the point of sale, turning the showroom into a customer-acquisition channel.
- Used-car expertise crosses over - the valuation and collection capabilities honed over 45 years in pre-owned commercial vehicles transfer directly to the used-car market, where asset assessment matters more than in new-car lending.
3. Two-wheeler finance: a leadership position in organised pre-owned lending
It dominates the organised financing of used two-wheelers, with a digital marketplace that lets a customer find a bike and get a loan in a single flow.
- Digital discovery meets instant credit - the Digital Two-Wheeler Marketplace integrates vehicle search with loan approval, so a buyer can locate a used motorcycle and secure funding without visiting a branch.
- Franchisee partners extend reach - tie-ups with revenue-sharing partners and small local financiers in the two- and three-wheeler segment multiply the distribution footprint without adding fixed costs.
- OEM relationships are deepening - the company has reinforced partnerships with two-wheeler manufacturers, positioning itself to capture both new and used financing as the market formalises.
4. MSME finance: lending to the businesses that keep the vehicles running
It provides secured and unsecured working-capital loans to small enterprises - including petrol pumps, tyre dealers, and vehicle body builders - effectively financing the ecosystem around its own transport customers.
- Ecosystem lending reduces risk - many MSME borrowers are part of the commercial-vehicle supply chain, so the company already understands their cash flows and business cycles from its core truck-finance relationships.
- Co-lending stretches the balance sheet - agreements with banks like Central Bank of India and Axis Bank under RBI’s co-lending framework mean the company originates and services loans while sharing the funding burden, earning fee income alongside interest.
- Scale has been built quietly - the MSME book has supported over 11 lakh enterprises with more than Rs. 73,000 crores in financing, making it the third-largest segment by assets.
5. Green finance: the electric-vehicle and solar bet under construction
It finances electric two-wheelers, three-wheelers, commercial vehicles, charging infrastructure, and rooftop solar - a small book today, built on OEM partnerships and government scheme alignment.
- OEM partnerships de-risk adoption - strategic tie-ups with Montra, Bajaj, TVS, Hero, Ola, Ather, Mahindra, and Tata mean the company finances vehicles from established manufacturers rather than unproven startups.
- It finances the whole EV stack - beyond vehicles, the portfolio includes battery financing, charging-infrastructure loans of up to Rs. 5 crores, and even the retrofitting of conventional vehicles to electric powertrains.
- Government schemes provide tailwinds - the company actively supports the Pradhan Mantri Surya Ghar Muft Bijli Yojana and the Surya Shakti Solar Finance Scheme, aligning its solar-loan book with subsidised national programmes.
Deposits and funding
A Rs. 69,480-crore retail deposit franchise, diversified bank lines, and a USD 3.5 billion global bond programme give the company a low-cost, sticky liability base that funds its lending.
- Deposits are the anchor - public fixed deposits, popular for their track record of better returns and safety, provide a stable funding source that does not flee in a liquidity squeeze.
- Social bonds widen the investor base - the company has issued USD-denominated Social Bonds under a framework aligned with ICMA principles, with proceeds earmarked for financing small road-transport operators and MSMEs from underserved communities.
- Liquidity is deliberately ample - a liquidity coverage ratio of 323% and roughly Rs. 13,000 crores of on-balance-sheet liquidity, enough for more than two months of liability repayments, mean the company is never a forced seller of assets.
Group structure and partners
Shriram Finance is the single listed flagship of the Shriram Group, with MUFG Bank holding a 20% stake and Board representation, while the housing-finance subsidiary was sold to Warburg Pincus in 2024.
- MUFG is the strategic partner - MUFG Bank completed a Rs. 39,618-crore preferential allotment in April 2026 for a 20% fully diluted stake, placing two directors on the Board while leaving operational control with Shriram Finance.
- Housing finance was divested - the company sold its 84.44% stake in Shriram Housing Finance (now Truhome Finance) to Warburg Pincus for Rs. 3,929 crores in December 2024, making it a discontinued operation.
- Shriram Automall is the associate marketplace - with a 44.56% stake, the company is linked to India’s largest physical-digital pre-owned vehicle auction platform, operating over 120 Automalls, which provides a secondary-market channel for the assets it finances.
- Insurance sits within the group - Shriram Life Insurance and Shriram General Insurance, both group companies, provide coverage to the lending customer base, creating a captive insurance distribution channel.