Redington to offer financial assistance to channel

Redington India announced its acquisition of a non-banking financial company
to facilitate financial support for its channel. And with that, financial
constraints faced by the channel community are set to get alleviated. “We have
acquired a Delhi-based finance company called Easyaccess for leveraging the
finance capabilities of our channel partners,” claimed, SV Krishnan, CFO,
Redington India. The venture is considered to be the first of its kind by a
distributor for its channel. Speaking more about this unique scheme Krishnan
said, “The channels were in need of strong financial support. The micro finance
scheme is a buffer to a certain level, but this kind of financial solution would
be beneficial to a great extent for channel partners, who need assistance for
survival as competition is huge in the industry.”

Claiming that the move would be a catalyst in the IT product segment, he said
that it would eventually bring a change in the market and also in the mindset of
people. It would give them more confidence while doing business. Redington took
over the financial company as it was looking to get into a non-banking proposal
for sometime, and when the offer came it could not afford to miss it. Said
Krishnan, “We were contemplating getting into this non-banking finance business
for a long time keeping in mind the welfare of our 13,000 partners. There was no
organized player in the channel finance segment except for a few banks, which
were also only providing partial help. So we took up the offer and closed the
deal for a good amount.”

The distributor also took this as an opportunity to provide value-added
services to its partner. “We have known our channel for quite a long time and
this would provide a good opportunity for Redington to show some way out for the
partners, besides acting as an inflection point for the potential improvement,”
Krishnan asserted. He added that the finance venture would work towards
preventing players from shying out of the business. Without being in Redington's
lap, Easyaccess would act as a separate entity, by providing financial
assistance to the channel, and Redington has also proposed to invest an amount
close to Rs 80 crore for this purpose. “We have not confirmed the sum. From the
inception of operations in Jan 2008, we have proposed disbursals for a few
thousand crore rupees for financing the channels,” Krishnan informed.

He also accepted the fact that this venture would obviously boost the sales
of Redington, besides helping the channel to grow. “This would create an
increased bondage between the channels and ourselves and people would see more
such positive plans in the future,” Krishnan informed. This would set an example
for other distributors and they too can look at providing similar kinds of
value-added services to their partners, who are the strength of distributors,
Krishnana further claimed.