The company complements the banks through its wide reach in the rural areas and the interiors of the state. Refinancing of CV & PV's requires a strong understanding of the grass-root level demand in the region, and MFIL has expertise in this niche.
MFIL follows three models to finance the vehicles:
- Direct – In this model MFIL extends vehicle finance through the facilities enjoyed from a consortium of bankers.
- Franchise - In this model, MFIL acts as a joint venture partner to various NBFC's like Shriram Transport Co. Ltd, wherein MFIL carries out the operations at an agreed cost of funds to the joint venture. The profit or loss is equally shared between the NBFC and MFIL.
- Securitization – Under this model, MFIL securitizes the receivables with other NBFCs and uses these funds for disbursement of loans.
The company provides end-to-end services ranging from customer acquisitions to credit appraisals to disbursement to collection of funds, while the NBFCs remains in the background and are mainly involved in the supply of funds. This business model is beneficial to the NBFCs as well, as it reduces their overheads while increasing their reach and market share.