Auto major, Honda Motorcycle and Scooter India Private Ltd (HMSI) has collaborated with financing company, Muthoot Capital Services Ltd to offer ‘need-based' loans to the company' customers.

The tie up is initially set up for customers in Tamil Nadu and Kerala, where the motor company has a strong dealer network. Subsequently it will be rolled out in Andhra Pradesh and Karnataka.

The alliance will enable the motor-maker to reach semi urban and rural markets, using the financial services of MCSL, which has a wide retail distribution network.

Under the agreed terms, the financing partner will offer vehicle financing options to prospective vehicle buyers at the authorised Honda retail outlets. The loans will be offered on EMI basis under the innovative ‘flexi repayment option'.

Commenting on the move, R Manomohanan, CEO, Muthoot Capital Services Ltd, said, "The two wheeler segment was picking up quite well, despite the market conditions. Muthoot is looking at having a decisive stake in this growing auto finance segment in this region."

Established in February 1994, Muthoot Capital Services Ltd is a Kerela based public limited, non banking financial company promoted by the Muthoot Pappachan Group. The company offers various financial products like vehicle loans and bonds & deposits.