With a legacy dating back to 1887, Non-Banking Financial Company (NBFC) Muthoot FinCorp, the flagship company of Muthoot Pappachan Group (also popularly known as Muthoot Blue) recently launched a new initiative – Spark Awards – to celebrate the achievements of micro-entrepreneurs across urban, semi-urban, and rural India.
Shaji Varghese, CEO, Muthoot FinCorp says, “We are celebrating the small entrepreneurs of India through the Muthoot Fincorp SPARK Awards. While these entrepreneurs are small individually, collectively their contribution to the overall economy, job creation, GDP is substantial. These entrepreneurs are risk takers and need to be identified and celebrated.” He continues, “Additionally, as a group and company, we have been serving small entrepreneurs for a long time and this is our target group. We are in the business of financial empowerment of the common man. Such awards recognize achievers, helps to raise the bar and also gives the winners an opportunity to interact with one another.”
Varghese says, “We are not looking at this initiative as an awards ceremony. We see this as a movement to help and work alongside the entrepreneurs for a longer duration and help them scale up.”
The Process
The entrepreneur set that Muthoot Fincorp is looking at, consists of small entrepreneurs who are not part of the formal business with a turnover of less than Rs 20 lakhs. For the selection process, interested entrepreneurs can visit any of the 4,000 offices/branches of Muthoot FinCorp nationwide, spread across 15,000 pin codes to submit their application.
A QR code is also being pushed through promotions and is available across all Muthoot FinCorp branches as well across the group companies. Varghese explains, “We are really looking forward to thousands of people participating. As we capture the individual data from across the country, the scale of this means this will be a digital process to ensure we get the data in a standard format.”
The shortlisted entries will be presented to an eminent jury comprising a panel of experts; who will ultimately decide the winners based on the available data. Varghese says that the entire process will be completely transparent and the company is going the extra mile to help the induvial collect their information and compile the data.
The awards will be presented across seven categories: Lifetime Achievement Award; Women Entrepreneur of the Year; Emerging Leader of the Year; Innovators of the Year; Tech Trailblazer; Social Impact Leader and Fastest Growing MSME / Inspiring Leader. In total 28 winners will be awarded, seven winners from seven categories.
The final winners will then be felicitated in an in-person ceremony and also get the opportunity to share the stage with actor Shah Rukh Khan. Commenting on the association of Shah Rukh Khan with this initiative he says, “The success story of our brand ambassador, Shah Rukh Khan, as a self-made man resonates, with the individual entrepreneurs who connect with the actor. The final winners will be sharing the stage with the actor who is part of this recognition program. Our brand ambassador is available not only for our TV commercials, but also for other larger social impact initiatives beyond the commercial operations.”
In addition, every participant will be given a certificate of recognition and appreciation. All the expenses – travel and stay – for the winner and a companion will be borne by Muthoot FinCorp. Varghese says, “The entire process is absolutely free of any charge as we celebrate small businesses and entrepreneurs of the nation. The winners would be the flag bearers of the six crores entrepreneurs from across the nation.”
Post the awards, the individual videos and stories of the winners will be shared as role models, to motivate others at the grassroot level. Going forward, this will be a continuing ongoing activity of the group every year.
India's Original Gold Loan Specialist
Muthoot Pappachan Group was started by Ninan Mathai as wholesaler for trading grains. The Group which planted its roots in retail trading, later diversified into various sectors including Financial Services, Hospitality, Automotive, Realty, IT Services, Precious Metals, and Alternate Energy. Muthoot FinCorp branched out to Gold Loan, first in its home state of Kerala before expanding to have branches nationwide. Varghese quips that when the Muthoot family started gold loans, there were no separate regulation and guidelines specifically for this sector. The company recently came with a recent three-film ad campaign that positions the company as the ‘Original Gold Loan Specialist.’
Speaking on the campaign he says, “Through this campaign we are attempting multiple things - highlight our history, vintage and expertise in gold loan, which is our flagship business. We understand what the customer is looking for and serve millions of customers every year. Second, a lot of people do not have access to credit in India because they lack documents. We want to send a larger message that we are a specialist and can deliver your requirements and deliver it with the dignity. We are sure the message is being communicated, and our customers and would appreciate the sincere intent we have been practicing for decades.”
Talking about the current credit market consumer scenario, Varghese states, “We are definitely seeing a very good momentum.” This he says is backed by the results of companies operating in the sector who have shown substantial progress and growth except some sectors like microfinance which is going through a credit normalization cycle or a default cycle. He says, “Our businesses like gold loan and our mortgage businesses and other business are definitely shown good growth. We are looking forward to continue with this growth momentum. I'm sure that sooner than later that sectors going through a credit normalization cycle, will hopefully get stabilized with even with the regulators, RBI’s act of making more money available at a lower cost.”
Having understood and identified products to serve customers has given the firm an opportunity, beyond gold loans. The company has launched multiple products such as business loan for a short tenure to meet the working capital requirement of retailers and MSMEs, long tenure loans, accessible data-trade modernization. Muthoot Fincorp recently launched another product for channel financing - financing needed to lift goods from the distributor to the retailer – as obtaining last mile finance is still a challenge for many. Another capability developed is digital lending, particularly for data poor lower/middle income families, where the DPI (Digital Public Infrastructure) footprint left by consumers, through UPI transactions etc, are deciphered to arrive at the consumer eligibility and then supply credit – with the entire process being fully automated and without any human intervention.
Another mission of Muthoot FinCorp, is to double their revenue from the non-gold loan portfolio in line with customer requirements that are far higher than in the past. Looking back three years, 98% of Muthoot Fincorp’s revenue used to be from a single product - gold loan. Varghese states, “We collect all data and provide a combination of products with which we see the revenue growing. In the last three years, our non-gold revenue has grown from 2% to almost 15% and we hope this 15% eventually becomes 30%. That’s our ambition and that’s the capacity we are building. We will have new products and services to meet consumer requirements. Needless to say, our gold loan business will continue to grow, and we will continue to focus on that.”
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