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Thinking Aloud Podcast with Ashish Mehrotra — Transcript

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0:00transition from from a great strong
0:02payment system to a great credit system.
0:05What what what will it take now? I mean
0:07so that we're on a secular path of
0:09>> Yeah. No, this this is this most
0:11important. It's called responsible
0:12finance. Correct. We've also offer
0:14scorecards to some of these institution.
0:16They use our scorecards to underwrite
0:18called new score. Essentially helping
0:21them do three things. uh bring their
0:23risk policy into play
0:25>> and very simplistically answer three
0:28four most important questions in credit.
0:30>> One whom to lend.
0:32>> Uh second how much to lend.
0:35>> Third what price to lend. Now if you've
0:38arrived at this you it gives you an
0:39answer saying what will be probability
0:41of default.
0:47>> [music]
0:50>> Hello and welcome to the IMA webcast. Uh
0:53I'm going to be speaking today with uh
0:54Mr. Mehotra.
0:56Mr. Bra has 20 years of experience as a
0:58banker, as an insurer, but now he is an
1:01investor and uh his focal point is to
1:04reach credit to people who deserve it
1:06and who are not getting it through the
1:08system. Welcome Mr. Moda.
1:10>> Thank you very much
1:11>> and thank you very much for your time.
1:13uh we'll state dive into your past and
1:18uh your experience and and then I have
1:21this curiosity to understand uh how is
1:24the transition feeling for you is it
1:27giving you a sense of fulfillment energy
1:29and all that
1:30>> yeah no I think it's a it's been a very
1:32interesting journey I started my career
1:34with city I worked with them for over
1:37two decades uh large part between credit
1:40risk uh running the lending businesses
1:42is probably through the most challenging
1:45period of 20067 crisis
1:48>> uh setting up distribution then running
1:50the entire retail bank for city in
1:52India. uh predominant focus uh for me
1:55through the life uh given I had lost my
1:58father earlier. My mother used to live
1:59with me uh was India focused and uh at
2:03some point in time a very interesting
2:05opportunity came to run insurance and to
2:07reimagine and the reason I liked it
2:10because the the parent company was was a
2:14second largest player but uh driven by
2:17the purpose healthier happier longer
2:19lives and I thought if 20 years what you
2:22want to do is you want to bring that
2:24purpose back into what you're trying to
2:26do and create a meaningful impactful
2:28full business I've done that found exit
2:31now they are listed and when I was
2:33exploring to do my next gig that's when
2:36stumbled upon northern they reached out
2:39I reached and and we we doing what we're
2:41doing
2:42>> the interesting part of this northern
2:45journey it was started in a classroom
2:47>> okay
2:48>> saying how do we use our knowledge uh in
2:50the financial products to enable the
2:53flow of money from people who have to
2:55people who needs it
2:57>> and the name Northern uh when we rebrand
2:59it is actually refers to the symbolic
3:02silk route of connecting uh west to east
3:06>> uh or vice versa. Uh and that's exactly
3:09what we've been doing. So strategically
3:12our focus is pretty clear continue to
3:14strengthen what's really core and
3:16important to us that is to create a
3:18meaningful create solution business.
3:20>> Mhm.
3:20>> Uh we bank almost every fintech. uh we
3:25track 4 to 500 non-bank finance
3:28companies, FinTech.
3:30>> Our idea is to get in at a very early
3:32stage. We look at their risk philosophy,
3:34governance and try to see how that
3:37philosophy
3:38policy is really acting on the ground.
3:42uh uh as a consequence we dipper feet
3:45take small risk with them.
3:46>> Mhm. and then continuously build and be
3:49a meaningful player in their journey uh
3:53to provide a liability powerful
3:56liability solution and that can come
3:58fair to say as the business has evolved
4:00we run a powerful fourwheel drive uh
4:05essentially one
4:06>> using a risk and data analytics and
4:09technology to understand the retail
4:12credit needs in India
4:15>> across let's call Then eight sectors or
4:18eight segments from micro finance to
4:21small, medium and large businesses to
4:24vehicle finance to affordable housing to
4:27agree supply chain to consumer aspiring
4:31young uh customers uh consumer products
4:35uh users uh going to gold climate. So
4:38that's the spectrum of way we operate.
4:42We uh bank these companies who operate
4:45in this provide them credit solution. We
4:48also run performing credit funds. We
4:50northern capital owns 100% of a asset
4:53management company called Nardanak
4:55Investment Managers. [snorts]
4:56>> Uh again focused on these seven or eight
5:00sectors where we deploy performing
5:03credit funds. We've run 12 funds. We've
5:05now launched 16th, 15th and 16th fund.
5:07Six have closed. Average return on the
5:10credit funds is about 14.5%.
5:13It's a 9-year track record. We deployed
5:15almost $2 billion. [snorts] Uh we're
5:18right now raising one for a diversified
5:20debt fund. Very interesting. [snorts]
5:23Please. And the second is the savings
5:25plus which is more tilted towards
5:27financial services two years uh lock in
5:30after that. You know it's a perpetual
5:32fund construct. [snorts]
5:33>> Uh so we support companies with lending
5:36from balance sheet. Correct. If the
5:38funds find the investment thesis match,
5:41the funds can also participate in the uh
5:44in those investment opportunities.
5:46>> Uh then we also work given a commitment
5:49and success of these companies. There's
5:51so much we can do but we also bring
5:53other domestic and global lenders to
5:55participate. Uh we probably run the most
5:58sophisticated securitization desk in
6:00Indian market.
6:02>> About 12 to 14% of India's
6:04securitization [snorts] goes through our
6:06pipes. So very sophisticated financial
6:09structured products uh to help people
6:11raise liquidity and the last part is uh
6:15if some of those are really good and I
6:17can offer to my mother those product
6:19then goes to our bonds platform called
6:22Altify
6:23>> where you could buy this 11 12 13% paper
6:28uh on it uh on a credit originated by us
6:31underwritten. So we make that available
6:32through a stronger due diligence. So the
6:35core principle uh of enabling the flow
6:38of credit as a consequences to coming uh
6:40to the question you had
6:42>> we would have touched and positively
6:44impacted about 150 million people.
6:47>> Wow.
6:47>> By doing this we've enabled almost 2 and
6:50a half lakh crores of credit in the
6:52ecosystem and where we operate we
6:54operate in companies in individuals who
6:58don't have access to credit. That's the
7:01core thesis of where we operate. So it's
7:03a very
7:04>> gratifying journey saying you are able
7:06to build a meaningful commercially
7:08viable impact
7:09>> impactful
7:10>> correct and and today we are publicly
7:12listed uh that's the strong governance
7:15strong quality of what we do uh this is
7:18where the large cohort of India lies uh
7:21correct while we've seen progress on the
7:23adult population having access to credit
7:25which has now gone to almost close to 60
7:2770%. But still large population don't
7:30have access to formal credit. And
7:32[snorts] the the second biggest
7:34opportunity area is the
7:36microenterprises. If you look at in
7:37India there's about 80 million
7:40registered MSMES
7:42and about 5 1/2 crores put it in rupees
7:45uh 5 1/2 crores uh are micro enterprises
7:50only 30 40% of them or 41% of them have
7:53access to formal credit. they are a most
7:56important constituents to our GDP. If
7:58you look at it, they are also most
8:00important constituents for employment.
8:02If you are able to create uh knowledge
8:06uh and provide access to credit, then it
8:08becomes a meaningful. So we we have a
8:10full spectrum on credit. I'm not just a
8:12vanilla lender and structurally the way
8:15it runs we are a high governance company
8:17[snorts] is that we use the same single
8:20origination single risk management and
8:22single
8:23>> technology stack for the flow of credit.
8:26Obviously when the credit goes to funds
8:29they have their own due diligence over
8:31and above what we have in the capital
8:34[snorts] or when it goes to the bonds
8:36platform then they look at suitability
8:38of that product to be offered to the
8:40right set of individuals. So uh that
8:43creates a powerful flywheel effect or a
8:45butterfly effect and network uh of being
8:48a meaningful player in company's life
8:51and providing them all set of solutions
8:53uh with regards to liability. So, so the
8:56prime minister mentioned uh day before
8:57yesterday when he was here uh he
8:59mentioned that we have created a great
9:02platform and uh guarded by good
9:05guardrails for payment. M
9:07>> now let's go ahead and conquer the
9:10credit side and that's my next question
9:14because I am old enough to know that uh
9:17the credit mechanism in this uh in this
9:20country works simply because there is an
9:23infinite headroom
9:26but we make progress and then we make
9:28regress so it's been like that since the
9:30micro finance days
9:33>> and pretty close to it. So this
9:35transition from from a great strong
9:37payment system to to to a great credit
9:41system what what what will it take now I
9:44mean so that we're not a secular path of
9:46>> yeah no no this this is this most
9:48important it's called responsible
9:49finance correct and you know I want to
9:52just build on three things [snorts]
9:54>> u and that's core to what we do so if
9:56you historically look at our own
9:58company's financial on this business
10:00probably will have one of the lowest
10:02GNPA and NPA so we understand the
10:05segment and I have 55 million time
10:08series of loan performance data.
10:10>> Goodness.
10:10>> Uh so that's the nature of work we do
10:13and that's why the risk governance comes
10:15into play. uh but I think going back to
10:18uh the comment you made
10:21>> uh there are three parts to it a decade
10:24earlier to the UPI transaction today at
10:27what 28 million 28 lakh crsactions have
10:31happened it's the highest ever look at
10:33how mindboggling it's probably the best
10:34network
10:35>> so the India threshold or the digital
10:38threshold what we call it between
10:40between UPI between Aadhaar and between
10:43mobile and all the entire network is
10:45probably powerful
10:46with what we are today this summit
10:48focused on AI. Mhm.
10:51>> There is always an information correct
10:53is the readability of the information
10:55which determines and I think the new age
10:58of agentic AI allows us to read that
11:01information far make it machine readable
11:03for us to take a cohesive decisions.
11:06>> I think that's the core of it. Uh that
11:08means you are then able to reach
11:10>> the issue comes uh especially since you
11:13are all leaded to micro finance and you
11:15know it's an important sector. We
11:17understand that sector at some point in
11:18time 5 to 6% of that credit goes through
11:21our pipe.
11:21>> Correct.
11:22>> Uh that sector faced some challenge uh
11:26for the first time that challenge was
11:29led by the institutions themselves
11:31rather than by a by by an disaster or a
11:36climatic event or stuff like that. So I
11:39think [snorts]
11:40uh and and that's the responsible
11:41lending the new guardrails now enables
11:44to ensure uh the maximum exposure to
11:47that rural household is well controlled.
11:50Uh the current performance over the last
11:536 n months is actually very good.
11:55>> Uh you know most that industry is
11:57performing really well. Uh they looked
11:59at the data. We've also uh we've also
12:02offer scorecards to some of these
12:04institution. And they use our scorecards
12:06to underwrite called NEOC score.
12:08Essentially helping them do three
12:10things. Uh bring their risk policy into
12:13play and very simplistically answer
12:16three four most important questions in
12:18credit.
12:19>> One whom to lend.
12:21>> Uh second how much to lend.
12:24>> Third what price to lend. Now if you've
12:26arrived at this you it gives you an
12:28answer saying what will be probability
12:30of default. That's how you bring the
12:31risk policy. The question of responsible
12:34finance comes into play that we all need
12:37to define a risk appetite and put
12:39together governance and guard rails
12:41which allows us to remain well within a
12:43risk uh risk profile and a risk
12:46frameworks and I want to just spend 30
12:48seconds answering two piece two parts to
12:51it and we've also learned and
12:54significantly evolved over a period of
12:56time uh uh and the two big pieces one
13:01when we when we bank with the about 350
13:04400 such institutions who operate in
13:06these segments. India has a large
13:08market.
13:08>> Absolutely.
13:09>> You need to have hyper local companies
13:11operating in states operating digital
13:13models non-digital fidgetital all of
13:16that is so I spoke to you I said earlier
13:19it's about the quality of the promoter
13:21the quality of governance the quality of
13:23cap table and the very clear definition
13:26of their target client model who's their
13:28target client and what products they
13:30want to offer to them.
13:32>> [snorts]
13:32>> But the core of learning is what I call
13:34is a moment of truth.
13:36>> Mhm.
13:36>> So our portfolio is spread at about 680
13:39districts in India. That's about 82 88%
13:41of India's geography.
13:44And uh we ensure that at least 240 to
13:47280 of the districts are independently
13:49covered by a risk officers essentially
13:52trying to measure the moment of truth.
13:56>> The moment of truth is how is that loan
13:58originated? How is it being
14:00underwritten? How's that getting
14:02serviced and how's that getting sunset?
14:05So that gives you a read much before
14:07>> any bureau data which is more lagging
14:10data which mean events have occurred and
14:12performance and reflecting on your
14:13scorecard that's too late in the day.
14:16This means you are there in the
14:17geography and you're able to get the
14:20pulse of what's happening uh and how
14:22people are behaving. How's that policy
14:24coming into play? And I think that's the
14:26core part of responsible financing. Your
14:29your risk policies clearly lays the
14:32guardrail. Then you have a control
14:34mechanism coming into play and then you
14:36check then you have sufficient checks
14:38and balances to bring to ensure that
14:42you're well within your guardrails. I
14:43think that's the core and I look and
14:45I'll tell you from my own business
14:47perspective the way we've diversif the
14:50way we've defined and pretty hardcoded
14:53is that
14:55we have limits at a sector level at a
14:57product sector level I spoke about eight
14:59sectors way we operate saying how much
15:02exposure at default I can have
15:04>> whether it's a lending we've done from
15:06our balance sheet whether it's an
15:08investment the funds has made and so on
15:10so forth
15:12>> and that goes down Then to state saying
15:15how much exposure can you have at a
15:16state level then it goes down to sector
15:20state product and then it goes down to
15:22district saying no point in time you
15:24want your beyond x percentage of your
15:26exposure across sector product in a
15:29location and that means you set your own
15:31guard rails to control how will you
15:34scale this business and you have
15:36sufficient control mechanism so that
15:38you're able to come out of one year 10
15:42year one one in 10 year crisis and one
15:44in 100year crisis. Now those crisis are
15:46realities of life. Correct. The crate
15:48cycles are realities. They are
15:49happening. [snorts]
15:50>> Uh we weathered two one in uh 100year
15:54risk events. Pandemic was one such event
15:57and you know and then many one in 10
15:58year risk event do continue to occur.
16:01How responsibly are are we going to deal
16:03with them is essentially a function of
16:05your [snorts] responsible finance and
16:07the policies and guardrails and control
16:09mechanisms which is important. I will
16:11digress a little bit and but a little
16:13bit only and because I can't let go of
16:16this opportunity of talking to you
16:18>> uh quickly three two three things
16:21farmers in our country
16:22>> they live on the edge
16:24>> and uh they're the ones who also take
16:27the biggest risk business and and
16:30agriculture as as I'm sure you are aware
16:33is the most risky business
16:37>> and uh and they also require credit and
16:41that that how do you how do you kind of
16:43how do you support them?
16:44>> I think so there there are companies we
16:46bank who who's very sharply focused on
16:48this segment.
16:50>> I think the current quality of the
16:52technology coming into play we are able
16:55to uh and they are able to significantly
16:58add uh value to the farmers both in
17:01terms of quality of land
17:03>> Mhm.
17:04>> what is the right crop for that land.
17:06You know one of the challenges we are
17:07dealing in Delhi is over the last 30 40
17:1050 years the crop patterns have changed
17:13>> uh what is uh you know you're now you
17:16will go through the period in Delhi
17:17where we will have challenges and that's
17:19a change in the
17:21>> uh so that's the second thing the third
17:23thing is also how do you monitor and
17:25track it so between drones and these
17:28technologies they are now coming into
17:30and uh and then vertical farming and all
17:33of that they're genuinely coming to
17:35significantly
17:36add value
17:37>> coupled with people like us helping
17:39those companies then with the right set
17:41of financing solution
17:43>> so that farmer has access to credit at
17:45the same time has access to knowledge
17:47and markets I think those two are big
17:49pieces so there are entities we bank we
17:52work with [snorts] them very closely on
17:54this segment to ensure we are able to
17:56add genuine value to people but do it at
17:59a scale correct and and do it in a way
18:02that it's also commercially viable and
18:04not uh piece but coming back to you I I
18:08want to just uh tell you another
18:10interesting example so we're right now
18:12trying to launch a product uh which is
18:15what we call we're a big player in uh
18:18term which is being used very often
18:20these days called blended finance
18:22>> blended fin
18:23>> so we're going to use philanthropic
18:25capital investment
18:27>> and then this gift city is wonder what
18:29Modi G's done correct
18:30>> we're going to use philanthropic capital
18:33raise public money and
18:35and
18:36lend money to smaller companies less
18:38than 50 70 100 crores. So that's how you
18:41can you can amplify the impact and we
18:44would like to do something on agree if
18:45you're able to find right set of
18:47>> uh such cohorts of population and I
18:49think that's an interesting play
18:51>> on the other extreme
18:53>> you also fund uh entrepreneurs startups
18:58>> and and uh given your experience funding
19:02people
19:02>> what is the kind of profile that you
19:04look in founders
19:05>> so I'll tell you two things we do uh
19:07first we are not equity we are debt okay
19:09>> we are predominantly debt
19:11>> uh but uh there is an institution which
19:15is now a bank we would have lend money
19:16to that institution when their average
19:18asset and the management was less than 2
19:20crores so I'm probably the first person
19:23to walk in and say listen I have a
19:26comprehensive play
19:28>> my success lies in you you successfully
19:31responsibly build that business
19:33>> uh and we bring the full might of
19:35northern house at play I think the core
19:40Whether it's equity or debt is about
19:44quality of entrepreneur the governance
19:47process and very clear definition of
19:49target client and then comes the capital
19:53>> correct the discipline and rigor becomes
19:56the most important play for us. Uh I
19:58think we don't want to get enamored
20:00because it looks very interesting but uh
20:03you know and that's why the control and
20:05moment of truth is very important for
20:07us. So some some some investors believe
20:10that um there are some founders who
20:12deserve to be successful.
20:14>> Of course
20:16>> we can tell you there are many
20:17institutions which has now become a bank
20:19whom we would have lend money 10 12 15
20:21years ago.
20:22>> They they're pretty large many of them
20:24have turned unicorns.
20:26>> Okay.
20:26>> Yeah.
20:27And uh finally uh it is a silly question
20:30but I have to ask you this is that uh
20:34there is a segment of uh borrowers in
20:37India which apparently uh seem to be
20:40borrowing for frivolous reasons like a
20:43family marriage
20:45or like a festival and all of that. Do
20:48you think there are frivolous borrowing?
20:49>> I think there are two things to it. uh
20:51the uh
20:54you uh I like to
20:58there is a consumption-led need one can
21:01understand correct and it is again the
21:04responsible finance and how do you
21:05provide
21:06>> u uh year and a half ago earlier when
21:09reserve bank of India increased the risk
21:12weight on uh on personal unsecured
21:16personal loan businesses was
21:18predominantly tor
21:20excessive borrowing in the sense was a
21:22lot of it going towards all these people
21:25who play many games on the phone and but
21:30>> I think that was a that was a that was a
21:32big issue that was a big issue
21:34>> uh we've seen the historically the
21:37performance of the loan so we run a
21:39pretty sophisticated you know we we we
21:42run a product uh where we bank and work
21:45with hundreds of such people
21:47>> uh you will be surprised on any given
21:49day I underwite, engage, connect, uh,
21:52fulfill with almost 22 to 23,000
21:56loans a day through our tech enabled
21:58system called NPOS.
22:00>> Uh, so you could be anywhere and you
22:03wanted access to credit. We are able to
22:05provide again again spectrum not only
22:07personal loan it could be business loan
22:09it could be housing it could be vehicle
22:11finance
22:12>> uh uh it could be your installing
22:14>> solar rooftop on your uh terrace or it
22:17could be for you know EV so I think we
22:20build the full spectrum of capability
22:22but you know the the performance of the
22:25portfolio is actually largely driven by
22:28the end use
22:29>> so when there is an end useled financing
22:31we see that the performance is much
22:33better so when I see [snorts] a lot of
22:35people going to skilling institutes to
22:37reinvent themsel that portfolio tends to
22:40perform much better than a pure
22:42consumption-led with
22:44>> but all of it also a function of cash
22:46flow.
22:47>> If you if you're just going to lend
22:48money because it's a short term it'll
22:50come and bite you.
22:51>> Okay,
22:52>> it has to be you you need to have you
22:54need to establish
22:56character intent cash flow and then
22:58everything else I think today's both
23:01technology and data allows us to do. So
23:03the scorecard we are able to use both
23:05leading and the lagging data to arrive
23:07at to ensure we are able to bank the
23:09right set of individuals.
23:11>> So technology allows you great speed to
23:14do things.
23:15>> Yeah.
23:15>> Yet the credit business requires a lot
23:17of discipline.
23:19>> The credit business requires lot of
23:21prudence and needs a strength of
23:22character to say no.
23:24>> So how do you balance these two?
23:26>> So I think the uh the technology and
23:28data enables us to bring lot more
23:31insights. the end of the day the
23:33decisions are individually led
23:35>> and in fact we were talking earlier
23:37during the day on responsible AI
23:39>> and I spoke about saying end of the day
23:41decision is made by individuals correct
23:44and there is accountability has to be at
23:46an individual level you can't say this
23:48is my what my model predicted and hence
23:50so many applications are getting
23:51>> actually exactly the same thing said the
23:54same seven sutras define around around
23:57these these principles
23:58>> so we do get lot of data and the
24:01strength of character uh is to say no
24:04>> no
24:04>> and to take corrective actions like I
24:06said in the moment of truth gives us a
24:08read of what's happening at a district
24:10levels and when this entire stuff
24:13>> about six or nine months before the
24:14general election we saw in some states
24:16and some districts
24:18>> this entire ground movement on loan
24:20wopsy you need to say boss listen slow
24:22down your credit in these markets
24:24because we're not going to see right
24:26side set of behavior I think that's
24:27where it is
24:29>> and uh this AI we you have mentioned
24:32that AI is going to be a help
24:35>> and there are guardrails but people are
24:37also concerned about uh about risks that
24:41uh AI based decisions.
24:43>> Yeah.
24:44>> U you know what kind of risks do you
24:47>> No no no I think there is the one
24:49biggest risk we as a country deal with
24:52is with information security and data.
24:54>> Mhm. You know and I know DPDPD is come
24:57into play with all of his consentbased
25:00limited data. These are few guardrails
25:02but you will be surprised India is the
25:04second most cyber attack country.
25:06>> Correct.
25:07>> We had over 5,000 plus attacks a week.
25:10>> Correct. We don't want to name who the
25:12first country is but so we we need to
25:15ensure two things. One everything is
25:17consent based.
25:18>> Uh that I have your consent to access
25:21set of information. I don't get enamored
25:23and take more information than so the
25:25information has to be limited and linked
25:27to the transaction that I need to use
25:29that information responsibly more
25:31importantly I need to protect your
25:33information at all points in time
25:35>> uh you can continue and that's the
25:37starting part of building an model once
25:40you've built a model you need to have
25:42continuous validation trust to ensure
25:44that the decisions are done the
25:46decisions are not left to the model
25:47alone but basically there has to be a
25:50responsible person behind that
25:52And that's with AI. Do you see a runaway
25:54risk?
25:56>> Of course, you can go wrong.
25:57>> I mean, you can uh and that's why while
26:00we have I I mentioned earlier, I'm just
26:02trying to connect the dot saying we have
26:0455 million time series of loan
26:06performance data
26:08>> live.
26:08>> But I can't I can't rely on that.
26:12>> Then that's why the touch and feel
26:14owning the moment of truth becomes very
26:16important saying otherwise everything
26:18looks good
26:19>> or you pick up too late. Uh and you know
26:22a lot of time when we have conversations
26:24not with such startups, enterpreneurs,
26:28fintexs you know we tell them listen
26:31this is what we are seeing your data may
26:33be telling you that your 30 DPD is well
26:35within control but we seeing what we
26:37seeing on the ground is very different.
26:39>> Uh because you can go and hit and borrow
26:41loans three times four times on the same
26:43day you will only get to realize 60 90
26:46days later by that time the money is out
26:48of the door. So the idea is to ensure
26:50that you build both the insights
26:52together to have the right set of
26:54decision making. Sir,
26:56>> what what is the kind of uh five big
26:59things that you want as the prime
27:01minister said now we need to focus on
27:03credit?
27:04>> No, I think the our big focus is on uh
27:06is on three or four uh uh few few items
27:10and I'm happy to do saying how do we we
27:12believe there's a biggest cohort of
27:13opportunity in the MSME space. M uh like
27:17I said only 41% out of the 8 1/2 crores
27:21have access to formal credit to me that
27:24is if we are able to work on it in our
27:26own way and bring the ecosystem of our
27:29network effect into play uh I think
27:32it'll have a meaningful contribution
27:33because that's the journey to what
27:35speaks at bharat the second big play is
27:38also how do we get uh in our own piece
27:42to create better financing solutions for
27:44people we work with uh especially if you
27:47look at it if you go back to two years
27:49ago the governor spoke about why are
27:53large part of non-bank finance companies
27:55borrowing only coming from the bank how
27:57do we open
27:58>> uh access to capital that's a big play
28:01we run a very large markets placements
28:03businessing how do we ensure we provide
28:05more access to capital this means
28:08>> we get more people to participate uh and
28:11bring the money back into the
28:12systemization is one such creating
28:15PTC investment papers uh for people to
28:19participate as a big play. This means
28:21bringing capital at play and and we do
28:23sizable amount of work both with
28:25domestic and the global institutions. If
28:27you look at
28:28>> our own liability profile of northern
28:30arc you will see about 30% of our
28:32funding comes from global multilaterals.
28:34We are the first route [snorts] for all
28:36the multilaterals for most of the
28:38multilaterals when they come into India
28:40and then we open doors to about 50 70
28:42other companies saying hey here is a
28:44good company you should look at them
28:47>> uh and we're happy to share our own
28:49experience uh because we only do those
28:52companies where we have skin in the game
28:54so I'm not going to do for entity whom I
28:56don't track whom I don't have it on my
28:58system and I don't have an exposure
29:01>> so that's the access to capital becomes
29:03the second Third also I think there is a
29:05big play on the retail participation of
29:08uh making the instrumental instruments
29:11the lending instrument uh through a
29:13bonds platform for retail to come in
29:17>> uh and see if there is a savings play.
29:19>> Uh fourth is big place technology can
29:22enable us to do of what we trying to do
29:24in terms of flow of access to credit
29:28capital at the at the ground. I think
29:30fifth we can do all of this unless you
29:32have a strong governance and controls
29:35around it you will bound to go wrong. So
29:36I think our big focus is on governance
29:38and the work we do and measure the
29:40impact you'll be surprised of the like I
29:43spoke about we've impacted 150 million.
29:46>> We also measure the impact I mean we are
29:48the uh ESG rating is outstanding. This
29:51means the work we do between social
29:52environment
29:54>> uh is is very important to us. So I
29:56think these are five big focus areas for
29:58us. we continue to embrace technology. I
30:00mean we started end to a model to for
30:04data analytics and all about 10 12 years
30:06ago.
30:07>> So uh one last bit in the sense that
30:11the the the MSMES that you mentioned are
30:15now increasingly micro entrepreneurs.
30:17>> Yeah. I mean borrowers lenders have been
30:19trying to reach out to them like over
30:21generations
30:23>> and their volumes are growing but with
30:26them the fundamental problems remain
30:28still identifying them
30:30out reaching out to them and then
30:33recovering from them and that
30:34fundamental problem
30:35>> I want to I want to just say one thing
30:37uh and I'm not saying this just because
30:39we're crowding it is no longer about
30:41reach
30:42>> okay
30:43>> uh I think uh given the way uh the the
30:48the [clears throat] BFSI space between
30:50banks the cooperative bank state rural
30:53non-bank finance company I don't think
30:54the reach is an issue
30:56>> the issue uh has always been about the
31:01readability
31:03uh machine readability of data and
31:05information
31:06>> so earlier and and let's take OKN is
31:09trying to solve one such issue uh is to
31:12say today using the AI both in terms of
31:15multilingual
31:17uh talking and reading capabilities uh
31:20ability to access their bahikata
31:24>> correct you it's not there on GST
31:26correct
31:26>> the the idea is to go back to people
31:28who's not even on the GST platform
31:29that's your micro enterprise
31:30>> correct
31:32>> so that's where I think I'm I'm very
31:34excited how do we use that AI
31:36>> to we make the data which today was not
31:39readable by machine readable information
31:43>> and u you know enable credit. I think
31:46that's the big opportunity sir
31:48>> and and the recovery has it improved
31:50>> the recoveries will improve if you have
31:52right set of conversation on the ground
31:55>> uh the recoveries will improve uh it is
31:58responsible money you know uh you cannot
32:00be lending more money uh good money
32:02after bad money so you know if you if
32:04you've assessed that information right
32:06>> then you're able to get the right set of
32:08outcomes I mean that's what we are
32:10obsessed end of the day um we want to do
32:13impact which is scalable
32:15but also commercially viable.
32:17>> Commercially viable. Thank you very
32:18much, Mr.
32:19>> Thank you, sir. Nice talking to you.
32:20Thank you.
32:21>> Thank you for your time.
32:26[music]

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