In a big-bang foray into the consumer finance space, Reliance Retail is entering into a joint venture (JV) with Citigroup for setting up a non-banking finance company (NBFC).

The NBFC, which marks the coming together of India’s largest business group and one of the world’s largest financial services groups, will largely deal in loans and credit cards for Reliance Retail customers. The investment is learnt to be in the region of Rs 430-450 crore and Citi is likely to hold a majority stake in the venture.

“The company is eager to get into consumer finance in a big way. If it has announced investments of Rs 25,000 crore in its retail venture, it might as well facilitate easy buying of goods,” said a source close to the development.

Reliance is gearing up for high-street retail with premium and luxury brands as well as the high-value consumer durables segment.It has recently signed up with maker Apple Computer to set up co-branded stores in the country.

Consumer finance, which would include loans and credit cards, is one of the fastest-growing segments in the financial services sector. With annual growth rates of 30-40%, global financial companies including GE (through a JV with Wizard) and Deutsche Bank are entering the segment. While annual credit card spends in India are estimated to be in the range of Rs 50,000 crore, it is difficult to estimate the total size of the consumer finance segment in India. For credit cards, against a global average of 4.6%, India’s penetration is said to be below 1%.