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Cash in Villages Signals End of Struggle for This Indian Lender

  • Rural sentiment has turned positive, Mahindra Financial says
  • Targets return on assets of 3 percent: Managing Director Iyer
Rural Electrification in Rajasthan Though Millions Remain in the Dark
Photographer: Anindito Mukherjee/Bloomberg

More cash in the hands of rural Indians along with their willingness to spend spells good news for Mahindra & Mahindra Financial Services Ltd., a non-bank lender for purchasers of tractors and vehicles, by helping it rebound from shrinking profits and increasing bad loans.

“After two years of struggle, we’re seeing that rural sentiment has definitely turned positive and farm cash-flow has held up,” Ramesh Iyer, vice chairman and managing director, said in an interview in Mumbai. “On-time, widespread and more-than-average rainfall predicted this year will lead to rural consumers pulling out money and spending it,” he said.