Franchise India to tie up with banks for small ticket loans

Franchise India is trying to bring-in a formal structure to franchise loans and act as a facilitator to provide easy loans for the benefit of small investors.

"We are working out on this (franchise loans) and are in talks with a few banks currently to develop a more proper and organised format for franchise loans to investors. Currently, the challenge is that the banks do not accept only capital equipment as security," Franchise India's President, Gaurav Marya, told PTI here today.

The franchise business, which is growing at a rate of 30-35 per cent annually will be the next tool to create entrepreneurship with an aim to promote financial inclusion.
The retail consulting firm is already in talks with five leading banks--SBI, HSBC, Punjab National Bank, ICICI Bank and HDFC, Marya said, adding that HDFC and SBI are already providing franchise loans but in a small way.

"It has to be more organised as only five per cent of the entire franchise financing requirement in India is met by financial institutions. Banks don't give industry-specific funding options to brand franchisees and often treat them at par with independent start-up businesses. This perception has to be changed," Marya added.