Thriving Strategies in a World of Survival
Alok Aggarwal, MD, National Trust Housing Finance
NBFCs and HFCs are growing at a phenomenal pace in India. Housing finance is different from commercial finance. Our lending range is 10-15 years, while other retail products in the personal loan category like gold loan, car loan have 12-36-month tenure. So, the span of lend and borrow funds is higher for the HFCs compared to other NBFCs in India. HFCs are facing challenges in raising funds for the long tenure, so they are adopting innovative solutions. We are facing liquidity crises due to the long-term lending. We target the bottom end of the customers and they are the first-time home buyers. They do not have proper documents to be eligible for loans. While the bureau score would help in getting online approvals, a physical touch is required to assess the eligibility.
K Deivarayan, MD, NKC Finance
The NBFCs will start accepting deposits in the coming months and performing NBFCs will be able to tap the NCD market. It depends on the efficiency. Funds are not the constrains for them. NKC Finance is mainly into the loan against property business and we are using technology at the maximum level to solve our customers’ problems. We are facing some competition from fintech companies and we are planning to partner with some in the personal loan segment.
Alphina Jos, CEO, BWDA Finance
Microfinance is the fastest growing segment in the NBFC sector. Before the NBFC crisis, things were smooth for larger MFIs, but smaller and mid-size NBFCs face challenges in new partnerships. So, they are trying to strengthen their existing partnerships. This segment has become very competitive and companies need to quickly cater the customer needs. Some of the things that have changed the way microfinance companies operate are eKYC, credit score and credit analysis. The low-income households looking for credit should be provided with assistance and offered financial education. We have provided water and sanitation loans to low-income households for creating their own infrastructure. Product innovation and catering to the specific needs of the customers are 2 things helping us to engage with the customers and retaining them.
JE Vasant, Senior Vice President, Camps
Banks have built the rail roads for creating the financial infrastructure and payments system in the country. NBFCs and other ecosystem partners have not followed what the banks have done - they have built their building blocks on top of it. Digital lending companies that have started the business do not need digital blocks from the business point of view. The old NBFCs in India are facing legacy challenges. The small finance bank and private banks have faster adoption of the digitization. Earlier customer onboarding cost `200-300, but digitization has helped to bring this amount to `15-50.
Premkumar, Systems Engineering Manager, Nutanix
We are advocating ‘pay as you grow’ model for the companies. It helps the customers in easy deployment of the application, it allows you to ‘pay as you grow’ and eliminates associated management complexities. We have different types of public clouds and private clouds for NBFCs, helping them serve the needs of the customers. We advocate adoption of public and private cloud (hybrid). The movement from the public to private cloud should be in a seamless manner. Land, physics and economics are the 3 laws. The land law deals with the regulations that RBI has specified for the financial institution. Laws of physics deals with physics. The third is the law of economics and it is the most important law which service business. It helps in making budget for the business.