Con­fer­ence Re­port 4

Banking Frontiers - - Housing Hihglights - ravi@glo­cal­in­fo­

V. Sreeram, Ex­ec­u­tive Direc­tor at Cen­trum HFC: There are more than 1000 NBFCs in In­dia and it is a very crowded mar­ket. NBFCs need to tar­get their seg­ment deeply. They need to adopt tech­nol­ogy. They need to first de­fine the prob­lem and later cre­ate solutions to work for them. NBFCs need to do things dif­fer­ently and in a right way.

Hari Pad­man­ab­han, Ex­ec­u­tive Chair­man at En­core Theme: The cus­tomer ex­pe­ri­ence plays a vi­tal role and there is need to cre­ate magic for the cus­tomer by mak­ing the things sim­pler, and it mainly de­pends upon the ap­proach adopted for the cus­tomer. Busi­nesses look at the tech­nol­ogy to solve prob­lems, and there is a busi­ness cre­ated on tech­nol­ogy and it cre­ates the fu­ture.

Bhavesh Pra­jap­ati, Head - Credit at Aad­har Hous­ing Fi­nance: Col­lec­tion of in­for­ma­tion is a ma­jor chal­lenge for most of the af­ford­able hous­ing fi­nance com­pa­nies in In­dia. Qual­ity, qual­i­tive in­for­ma­tion and bu­reau score are the 3 sources of col­lect­ing the in­for­ma­tion. Quan­ti­ta­tive in­for­ma­tion comes from the ap­pli­ca­tion form, in which in­for­ma­tion like cus­tomer age and de­mog­ra­phy is avail­able. Through

Bank­ing Fron­tiers or­ga­nized an un­con­fer­ence to brain­storm and ex­plore growth vis­tas among NBFCs and HFCs. En­core Theme was the knowl­edge part­ner for this pro­gram. Ex­cerpts from the pre­sen­ta­tions:

qual­i­ta­tive sources, NBFCs can col­lect the in­for­ma­tion about the cus­tomer age, life­style, sav­ing habit, cus­tomer bank­ing be­hav­ior, etc. 60% of our cus­tomers are first time loan bor­row­ers. We have adopted a dif­fer­ent ap­proach for for­mal and in­for­mal cus­tomers. For for­mal cus­tomers, weigh­tage is given on qual­i­tive col­lec­tion meth­ods and for in­for­mal set of cus­tomers, we give more im­por­tance to qual­i­ta­tive pa­ram­e­ters.

Hous­ing fi­nance com­pa­nies mainly fol­low a flex­i­ble ap­proach be­cause they don’t have a cen­tral­ized pol­icy. The NBFCs have flex­i­ble ap­proach for location, ge­o­graphic, cus­tomer pro­file prod­uct. The flex­i­ble ap­proach in risk man­age­ment is the USP for NBFCs. How to ver­ify cus­tomer sub­jec­tiv­ity is the ma­jor is­sue and score­card is mainly used to con­vert sub­jec­tive ap­proaches into ob­jec­tive ap­proaches. Skill set is the big­gest chal­lenge in this in­dus­try.

Av­inash Khanna, Head - Sales & Dis­tri­bu­tion (Ed­u­ca­tion Loans) at In­cred: Banks are do­ing great work; they are op­er­at­ing in huge struc­tures; they have large bal­ance sheets and huge num­ber of de­posit ac­count hold­ers. Hence banks must fol­low reg­u­la­tory norms, they must fol­low strict prac­tices in lend­ing process.

NBFCs must find out the right seg­ment and mar­ket, they need to de­sign their man­age­ment and prac­tices cor­rectly. Ba­jaj Fi­nance has cre­ated a bench­mark in cus­tomer durable in­dus­try.

Ed­u­ca­tional loan plat­form is largely ig­nored by the PSU banks as they fol­low con­ven­tional prac­tices in that seg­ment. Our com­pany uses al­ter­na­tive data in a strong way like ac­cess­ing the aca­demic pro­file of the stu­dents and em­ploy­ment op­por­tu­ni­ties be­fore giv­ing ed­u­ca­tional loan to the stu­dents.

San­deep Wirkhare, MD & CEO at Ar­yarth HFC: To­day, tech­nol­ogy is avail­able in ev­ery as­pect of cus­tomer ac­qui­si­tion and tech­nol­ogy solutions are avail­able for ev­ery busi­ness so­lu­tion which in­cludes ac­qui­si­tion, ex­e­cu­tion and de­liv­ery of prod­ucts and ser­vices. The cost of tech­nol­ogy is also the one of the im­por­tant fac­tors for the start-up com­pa­nies. The need of the af­ford­able hous­ing fi­nance com­pa­nies is to get the tech­nol­ogy provider to de­liver tech­nol­ogy which pro­vides tech­nol­ogy tools for chat­bot, so­cial me­dia and cus­tomer ac­qui­si­tion.

Sabyasachi Rath, MD at Es­sel Fi­nance: GST is a game changer for the NBFCs in In­dia. Aad­har and GST will de­cide the cus­tomer cred­i­bil­ity. The de­liv­ery mech­a­nism of NBFC is stronger com­pare to the banks. NBFCs deeply an­a­lyse cus­tomer seg­ment, past in­come, liq­uid in­come, etc, and these dif­fer­en­ti­ate NBFCs from the banks. NBFCs are get­ting in to the short­term re­ceiv­able fi­nanc­ing, which is low risk busi­ness. There is a blur line be­tween ser­vice and prod­uct, the prod­uct can be ser­vice, and ser­vice can be prod­uct. Blockchain tech­nol­ogy will help in main­tain­ing the pri­vacy of the cus­tomer data. There is no life span of tech­nol­ogy - it needs to be dy­namic to pro­vide in­stant solutions.

A pan­elist stress­ing on a point at the un­con­fer­ence

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