Goal Is To Reach 60 Cities By 2025; Achieve Rs 50,000 Cr AUM Growth By FY28: Pankaj Gupta, Godrej Capital
In an interview with BW Businessworld, Pankaj Gupta, Chief Business Officer (CBO), Godrej Capital has said that the company is eyeing to reach 60 cities in the next 18 months, with assets under management (AUM) growth of Rs 30,000 crore by FY26 and Rs 50,000 crore by FY28.
Gupta said that Godrej Capital is strengthening its network and will target over 10,000 partners in the next two to three years. "Customer-centric innovations are the driving force behind our growth. Edited excerpts:
Can you describe your experience in managing operations during festive seasons? What strategies have you implemented in the past to ensure smooth operations?
The festive season presents a golden chance for small business owners to capture most of their yearly sales. During this time, micro, small and medium enterprises (MSMEs) have ample opportunities to leverage the increased consumer demand and positive spending patterns by investing in the expansion and growth of their businesses. However, these businesses often struggle to get timely funds at favourable credit terms to invest in their operations.
As a non-banking financial institution offering tailor-made loans to cater to the requirements of MSMEs, we also witness a spike in demand for capital during this time. We cater to this demand through a strong network of over 2,500 channel partners in the 31 markets where we operate, extending both secured and unsecured loans.
Time is of the essence during this period and hence we have a specific focus on turnaround times for loan disbursals. To increase awareness about the flexible features of our loans, such as 'Design your EMI' (allowing borrowers to pay only interest for selected periods) or Bizrewards (flagship timely repayment reward program), we started a digital marketing campaign. By focusing on both creating pull-through marketing and efficiently catering to the customer flow, we have struck a good balance.
What support is Godrej Capital extending to the MSMEs and how does your company see the future of small sellers and MSMEs? Tell us how the Nirmaan platform helps SMEs raise funds and grow businesses. Any significant achievements you would to talk about?
MSMEs are vital to the Indian economy, contributing about 30 per cent to the country's total gross domestic product (GDP). With Nirmaan, we have collaborated with multiple partner platforms and designed a comprehensive platform aimed at supporting the holistic growth of MSMEs. Our partner network includes unique offerings from Amazon, GemTech Paras, Zolvit and MSMEx, among others, to address common challenges faced by businesses, from skills shortages to marketing hurdles and regulatory compliance. We aim to expand this network to ensure MSMEs get the required support at every step of their journey.
Indian MSMEs face several issues such as high debt and delayed payments. How do you see the global demand for Indian SME products at the current times?
India's MSME sector is a key contributor to the nation's economy, providing millions of direct and indirect job opportunities and accounting for approximately 40 per cent of exports. It has been projected that Indian MSME exports possess the potential to reach USD 1 trillion by FY27. The government's recent efforts to promote SMEs have encouraged growth and innovation, resulting in a rise in international demand for Indian SME products.
The Indian government’s initiatives like Make in India, AtmaNirbhar Bharat and Digital India have created a conducive environment for SMEs, increasing their competitiveness in the global market. India's diverse workforce, cultural heritage, and cost-effective products have also contributed to the growing global demand for Indian SME products. Further, ecommerce has enabled SMEs to reach beyond India's borders, underscoring the importance of necessary regulations and infrastructure to enable digitalisation.
How does Godrej Capital ensure that the company's operations remain strong and responsive to market dynamics during the festive season?
The lending sector in India is a highly competitive market. As per industry reports, MSMEs in India have an overall debt demand of approximately Rs 69.3 trillion, with a compounded annual growth rate (CAGR) of 11.5 per cent, while there still exists a credit gap of around Rs 25 trillion.
As a late entrant in the marketplace, Godrej Capital aims to build on the trust the ‘Godrej’ brand enjoys among Indians and design truly customer-centric and flexible loan products that allow customers to grow to their potential. We believe this approach and customer-driven mindset enable us to stand out.
MSMEs that are not integrated with ecommerce platforms are likely to find it more challenging to access markets. What are your views on this?
In today's digitalised landscape, establishing a robust online presence is essential for expanding the reach of businesses. The digital shift has provided MSMEs with unprecedented opportunities to scale their operations. Being present on prominent online marketplaces is crucial for MSMEs, as it increases their visibility to a vast consumer base by enabling access to global markets. However, these businesses often encounter obstacles like limited adoption of industry standards, logistical challenges, and a lack of market insights.
Established global marketplaces serve as gateways to valuable market intelligence and facilitate MSMEs' global expansion. The pandemic has accelerated ecommerce growth, offering MSMEs the chance to expand rapidly, even into tier-two and three cities. Our strategy focuses on empowering MSMEs with the necessary tools and knowledge to harness e-commerce platforms effectively. With 13 partners currently on board and ongoing expansion efforts, our goal is to ensure that every MSME can thrive in the digital marketplace and access a broader customer base.
While there are gains to MSMEs by integrating with ecommerce platforms, for those who are unable to join, technology may represent a survival threat. How can these firms solve this issue?
India's rapidly growing digital consumer market, with over 900 million internet users, presents an opportunity for transformation. While businesses have been inconsistent in adopting technology, this digital shift can bring significant economic benefits and reshape employment for millions.
For MSMEs, selling on ecommerce platforms opens doors to expanded reach, effective competition with larger peers, and broader sales potential. These platforms offer advanced marketing tools and data analytics, improving audience targeting and sales strategies. Ecommerce also cuts out intermediaries and physical storefront costs.
Can you tell us, what are the internal goals and strategies your company is planning to take in the upcoming time to take the growth one step forward?
We're enhancing the flexibility of our loan products to empower customers to manage their finances while pursuing their dreams. Our semi-fixed interest rate home loans lock in rates for the initial three years before switching to a floating rate.
In the MSME segment, we've started business loans and udyog loans against property offerings, featuring innovations like BizRewards, extended tenures and larger loan amounts. An overdraft facility is in the works to support small businesses. We're further expanding Nirmaan to ensure support for MSMEs that goes beyond lending.
Our goal is to reach 60 cities in the next 18 months, with an AUM growth of Rs 30,000 crore by FY26 and Rs 50,000 crore by FY28. We're strengthening our network, targeting over 10,000 partners in the next two to three years. Customer-centric innovations are the driving force behind our growth.
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