Upholding the need for grassroot-level connectivity, Mahindra Finance is focussed to mark its presence at the village level, says Ramesh G Iyer, Managing Director & CEO – Financial Services Sector & Member of Group Executive Board, Mahindra & Mahindra Financial Services Ltd, in an interaction with Veena Kurup of ENN
Financial inclusion has opened new avenues for banking and finance sector, particularly NBFCs, to expand their reach to the unbanked population. How do you view the scenario and do you suggest any changes in the banking approach?
I feel the entire approach towards financial inclusion needs a change. The shift in the approach is suggested, as people still look upon financial inclusion as a regulatory requirement rather than prospective business opportunity. Mahindra Finance realised the need for this change when we ventured into rural India by financing vehicles like tractors to marginal farmers. The entire business model in terms of delivery, channel developments, service standards and product designs need a considerable change. According to me, the focus needs to be on the customer’s capability rather than the financier’s. The banking system today is based on the regulatory framework models and not dependent on the consumer requirements.
What is the approach practised at Mahindra Finance?
Our approach has always been to establish close relationship with our customers. We primarily focus on initiating branches at the district level. Currently, we have further deep-rooted our approach by opening branches at the village level. If you want to understand the customer and their requirements then you need to make your services available within their vicinity. In addition, we recruit employees for such branches from similar localities. This enables the staff to understand the customer, his language of communication, respective demands and address the concerns better. Such staff help the banks or financial institutions in gaining a crystal clear image of the customer’s prevailing situation and challenges. We at Mahindra Finance always uphold this policy and will further enhance it by expanding our presence through village level branch networks, connectivity within the pockets and by recruiting and training local people to deliver our products and services to the customers.
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“The entire approach towards financial inclusion needs a change, as people still look upon financial inclusion as a regulatory requirement rather than prospective business opportunity”
Do you believe that effective utilisation of technologies like mobile phones can be useful in establishing effective connectivity?
Definitely, technology plays a very crucial role in better service delivery and in expanding the reach to customers located in unbanked regions. Mahindra Finance is one of the leading NBFCs and we have our own people on the street. We never adopt or follow an intermediary approach. We will definitely utilise and implement technologies which can further benefit our operational process. However, I see a need to train the staff who function at such the grassroot level with our customers and deliver such services. A partnership approach is needed rather than a regulatory one while exploring the apt potential of such services.
Moreover, while offering such technology- enabled services, the bankers or financiers need to primarily focus upon the products put forth for such customers and on the ability to win customer confidence. You need to ensure that you are looking forward to a long-term presence in the region. Trust building is a vital aspect for the success of such initiatives.
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How do you look upon the opportunities from Retail and SME segments in India?
Both retail and SME segments enjoy robust potentials in India. However, a clear gap exists in the demand and availability of the credit resources. Opportunity is not a concern, but the product designs to suit customer’s cash potentials and choice are a prime factor that need more focus.