The Man with the Golden Touch

From its humble origins Manappuram Finance has emerged as a leading national NBFC. Today the company has around 3000 branches across 26 states and UTs with Assets under Management  of about Rs.11,600 crores, a workforce of about 22,000 and a live customer base of 16 lakhs.

The man behind the entire transformation is Mr. V P Nandakumar, the Managing Director and CEO of Manappuram Finance. He took over the reins of the business in the year 1986. Since then this Valapad based company has shown unparalleled growth. Associate Editor of Unique Times Bejoy George had a small talk with V P Nandakumar, about his company and corporate life. The man with the golden touch.

Manappuram Finance is a frontrunner in providing financial solutions to customers? What are the core values of the company? How do the values shape the policies taken?

Our core value Is quite simple and perhaps common to all services oriented businesses. The customer is all-important. We aim to deliver value to the customer and no matter what his economic status is, we believe that time is precious and everyone is entitled to courtesy and prompt service. That is why we have taken so much effort in making gold loans a simple and hassle-free product which can be availed in very small amounts too. It benefits the common man.

Which were the major turning points during the history of Manappuram Finance?

It may interest you to know that we are known today as a gold loans company but when we were incorporated in 1992 we did not deal in gold loans at all. In those days, our focus was on leasing, vehicle loans  and the general finance areas while the gold loans  business was being carried on in the original proprietary concern. It all changed around 1997-98. That was when we faced our first serious adversity when the Reserve Bank suddenly tightened the screws on the NBFC sector (following the CRB scam), making it very difficult for us to raise deposits. We were faced with a crisis-like situation as we ran into a serious asset-liability mismatch. It compelled us to rework our strategies and we realized we had made a mistake in relegating the gold loan business. We then decided to bring gold loans into Manappuram Finance Ltd., in the process becoming the first corporate (and listed) entity in India to get into gold loans. It helped us because gold loans are not risky like other loans, and very short term in nature and solved our asset-liability mismatch. Looking back, this was certainly a critical turning point for us.

 What was your biggest challenge, building up Manappuram Finance?

The biggest challenge building up Manappuram, and I would say this is common to all NBFCs, is the regulatory uncertainty that NBFCs in India have to face. Raising funds for growth has always been a challenge and in the initial years the banking sector was hesitant to lend to us. We could build a momentum only after ICICI Bank, and later Temasek, came on board in the early years of this millennium. However, we really managed to break out only after we had succeeded in attracting foreign private equity investment in 2007. After that, things were much smoother.

How do you face challenges that are emerging in the markets?

I believe that if you have chosen to be an entrepreneur, challenges have to be accepted as part and parcel of your life. I also think challenges are best faced when you are prepared to take the ups and downs with equanimity, and when you have a good team to back you up.

Manappuram is a now a well known brand. Can you please tell us more about the branding and Marketing strategy? How difficult was the execution of the branding exercise?

Manappuram began as a very local or regional brand, it was closely identified with the village of Valapad where it all began in 1949. When we began to expand  rapidly around 2007-08, we had two challenges to face. One was, of course, spreading the word about brand Manappuram. The other challenge was to win greater acceptance for gold loans in general, so that it would become a preferred option for customers, and not a last resort. Therefore, the marketing strategy was about promoting Manappuram and about promoting gold loans. And if you look at our television ad campaigns, we have succeeded in both our objectives.

The current strategy with major film stars, including Mohanlal and Akshay Kumar worked out well for Manappuram? What was in your mind when you started out with the campaign?

Until Manappuram’s example, the usual strategy followed was to invest in one credible brand ambassador  to talk to the whole country. The strategy of using regional brand ambassadors, who would then talk to the people in their own languages was actually a Manappuram innovation. We believed that a brand ambassador would carry greater credibility this way. That’s why we had Mohanlal in Kerala, Vikram in Tamil Nadu, Nagarjuna in AP and Puneeth Rajkumar in Karnataka before we signed on Akshay Kumar for northern India.

What is the current asset base of Manappuram Finance ? What is Manppuram headed for in the next 5 years?

Our gold loans portfolio stands at about Rs.11,000 crores. Over the next five years, I expect to see reasonable growth. Of course, there is a certain amount of uncertainty in the regulatory environment today that is weighing on the performance of gold loans NBFCs. However, I am confident that this is a short term phenomenon and it won’t be long before policy makers wake up to the full potential of gold loans, particularly in advancing financial inclusion.

Has the perception of Gold Loans changed in our society? Is the new generation thinking of Gold as a viable option?

There’s no doubt that perceptions are beginning to change in our society. The earlier idea that gold loans are a kind of distress loan is giving way to a more informed attitude. There’s now much greater recognition about the utility of gold loans especially when it comes to short term needs and as a bridge loan that allows you to honour commitments, or close a deal even when the long term funding is yet to be tied up.

Gold loan  has many advantages over other options like, personal loan, credit cards advance etc. Is the new generation aware of these facts?

As a matter of fact, until very recently, the younger generation was quite unaware of how gold loans could be of help with their financial needs. However, things are beginning to change, with greater publicity and with commercial banks also stepping and promoting gold loans being a risk-free loan.

Tell us more about Riti Jewellers? Is Riti changing the Jewellery business as Manappuram changed the Gold loan Business?

Riti Jewelry is the brand name owned by Manappuram Jewellers Ltd. We began with our first showroom in Valapad in March 2010. Since then, we have expanded across South India and today we have eighteen showrooms including eight in Bangalore city.  When we got into the retail jewellery business, our target was the middle class market, and our objective was to offer gold jewellery of the highest purity at the lowest making charges. From the very first day, we have been dealing only in BIS hallmarked gold

The recent 916+1 campaign has gone down well among customers? Can you tell us more about that?

The idea behind 916+1 campaign was to draw attention to the extra assurance about the purity of gold at Riti Jewelry, and in that sense the campaign has managed to create a stir. Incidentally, while the popularity of hallmarked gold has improved the quality of gold in the market, instances of sub-standard purity are still widespread.

Tell us more about the healthcare division MAcare? What are the future plans of MAcare?

Manappuram Health Care Ltd. (MAcare) is our foray into the affordable healthcare space. Our objective is to make diagnosis and treatment affordable to a wider cross-section of society using state of the art medical tools.  We have plans to launch a chain of Dental and Diagnostic clinics in the coming years. In fact, we have set up the most advanced facility of its kind, the MAcare International Diagnostic and Dental Clinic at Kaloor, with an investment of over Rs.17 crores.

Ultimately, we hope to make a difference to the healthcare space exactly in the way that Manappuram Finance has done wonders to gold loans, introducing professionalism and transparency to a traditional activity dominated by small, unorganised players.

Manappuram Finance is a frontrunner in providing financial solutions to customers? What are the core values of the company? How do the values shape the policies taken?

Our core value Is quite simple and perhaps common to all services oriented businesses. The customer is all-important. We aim to deliver value to the customer and no matter what his economic status is, we believe that time is precious and everyone is entitled to courtesy and prompt service. That is why we have taken so much effort in making gold loans a simple and hassle-free product which can be availed in very small amounts too. It benefits the common man.

Which were the major turning points during the history of Manappuram Finance?

It may interest you to know that we are known today as a gold loans company but when we were incorporated in 1992 we did not deal in gold loans at all. In those days, our focus was on leasing, vehicle loans  and the general finance areas while the gold loans  business was being carried on in the original proprietary concern. It all changed around 1997-98. That was when we faced our first serious adversity when the Reserve Bank suddenly tightened the screws on the NBFC sector (following the CRB scam), making it very difficult for us to raise deposits. We were faced with a crisis-like situation as we ran into a serious asset-liability mismatch. It compelled us to rework our strategies and we realized we had made a mistake in relegating the gold loan business. We then decided to bring gold loans into Manappuram Finance Ltd., in the process becoming the first corporate (and listed) entity in India to get into gold loans. It helped us because gold loans are not risky like other loans, and very short term in nature and solved our asset-liability mismatch. Looking back, this was certainly a critical turning point for us.

What was your biggest challenge, building up Manappuram Finance?

The biggest challenge building up Manappuram, and I would say this is common to all NBFCs, is the regulatory uncertainty that NBFCs in India have to face. Raising funds for growth has always been a challenge and in the initial years the banking sector was hesitant to lend to us. We could build a momentum only after ICICI Bank, and later Temasek, came on board in the early years of this millennium. However, we really managed to break out only after we had succeeded in attracting foreign private equity investment in 2007. After that, things were much smoother.

How do you face challenges that are emerging in the markets?

I believe that if you have chosen to be an entrepreneur, challenges have to be accepted as part and parcel of your life. I also think challenges are best faced when you are prepared to take the ups and downs with equanimity, and when you have a good team to back you up.

Manappuram is a now a well known brand. Can you please tell us more about the branding and Marketing strategy? How difficult was the execution of the branding exercise?

Manappuram began as a very local or regional brand, it was closely identified with the village of Valapad where it all began in 1949. When we began to expand  rapidly around 2007-08, we had two challenges to face. One was, of course, spreading the word about brand Manappuram. The other challenge was to win greater acceptance for gold loans in general, so that it would become a preferred option for customers, and not a last resort. Therefore, the marketing strategy was about promoting Manappuram and about promoting gold loans. And if you look at our television ad campaigns, we have succeeded in both our objectives.

The current strategy with major film stars, including Mohanlal and Akshay Kumar worked out well for Manappuram? What was in your mind when you started out with the campaign?

Until Manappuram’s example, the usual strategy followed was to invest in one credible brand ambassador  to talk to the whole country. The strategy of using regional brand ambassadors, who would then talk to the people in their own languages was actually a Manappuram innovation. We believed that a brand ambassador would carry greater credibility this way. That’s why we had Mohanlal in Kerala, Vikram in Tamil Nadu, Nagarjuna in AP and Puneeth Rajkumar in Karnataka before we signed on Akshay Kumar for northern India.

What is the current asset base of Manappuram Finance ? What is Manppuram headed for in the next 5 years?

Our gold loans portfolio stands at about Rs.11,000 crores. Over the next five years, I expect to see reasonable growth. Of course, there is a certain amount of uncertainty in the regulatory environment today that is weighing on the performance of gold loans NBFCs. However, I am confident that this is a short term phenomenon and it won’t be long before policy makers wake up to the full potential of gold loans, particularly in advancing financial inclusion.

 Has the perception of Gold Loans changed in our society? Is the new generation thinking of Gold as a viable option?

There’s no doubt that perceptions are beginning to change in our society. The earlier idea that gold loans are a kind of distress loan is giving way to a more informed attitude. There’s now much greater recognition about the utility of gold loans especially when it comes to short term needs and as a bridge loan that allows you to honour commitments, or close a deal even when the long term funding is yet to be tied up.

Gold loan  has many advantages over other options like, personal loan, credit cards advance etc. Is the new generation aware of these facts?

As a matter of fact, until very recently, the younger generation was quite unaware of how gold loans could be of help with their financial needs. However, things are beginning to change, with greater publicity and with commercial banks also stepping and promoting gold loans being a risk-free loan.

Tell us more about Riti Jewellers? Is Riti changing the Jewellery business as Manappuram changed the Gold loan Business?

Riti Jewelry is the brand name owned by Manappuram Jewellers Ltd. We began with our first showroom in Valapad in March 2010. Since then, we have expanded across South India and today we have eighteen showrooms including eight in Bangalore city.  When we got into the retail jewellery business, our target was the middle class market, and our objective was to offer gold jewellery of the highest purity at the lowest making charges. From the very first day, we have been dealing only in BIS hallmarked gold

The recent 916+1 campaign has gone down well among customers? Can you tell us more about that?

The idea behind 916+1 campaign was to draw attention to the extra assurance about the purity of gold at Riti Jewelry, and in that sense the campaign has managed to create a stir. Incidentally, while the popularity of hallmarked gold has improved the quality of gold in the market, instances of sub-standard purity are still widespread.

Tell us more about the healthcare division MAcare? What are the future plans of MAcare?

Manappuram Health Care Ltd. (MAcare) is our foray into the affordable healthcare space. Our objective is to make diagnosis and treatment affordable to a wider cross-section of society using state of the art medical tools.  We have plans to launch a chain of Dental and Diagnostic clinics in the coming years. In fact, we have set up the most advanced facility of its kind, the MAcare International Diagnostic and Dental Clinic at Kaloor, with an investment of over Rs.17 crores.

Ultimately, we hope to make a difference to the healthcare space exactly in the way that Manappuram Finance has done wonders to gold loans, introducing professionalism and transparency to a traditional activity dominated by small, unorganised players.

Manappuram Finance is a frontrunner in providing financial solutions to customers? What are the core values of the company? How do the values shape the policies taken?

Our core value Is quite simple and perhaps common to all services oriented businesses. The customer is all-important. We aim to deliver value to the customer and no matter what his economic status is, we believe that time is precious and everyone is entitled to courtesy and prompt service. That is why we have taken so much effort in making gold loans a simple and hassle-free product which can be availed in very small amounts too. It benefits the common man.

Which were the major turning points during the history of Manappuram Finance?

It may interest you to know that we are known today as a gold loans company but when we were incorporated in 1992 we did not deal in gold loans at all. In those days, our focus was on leasing, vehicle loans  and the general finance areas while the gold loans  business was being carried on in the original proprietary concern. It all changed around 1997-98. That was when we faced our first serious adversity when the Reserve Bank suddenly tightened the screws on the NBFC sector (following the CRB scam), making it very difficult for us to raise deposits. We were faced with a crisis-like situation as we ran into a serious asset-liability mismatch. It compelled us to rework our strategies and we realized we had made a mistake in relegating the gold loan business. We then decided to bring gold loans into Manappuram Finance Ltd., in the process becoming the first corporate (and listed) entity in India to get into gold loans. It helped us because gold loans are not risky like other loans, and very short term in nature and solved our asset-liability mismatch. Looking back, this was certainly a critical turning point for us.

What was your biggest challenge, building up Manappuram Finance?

The biggest challenge building up Manappuram, and I would say this is common to all NBFCs, is the regulatory uncertainty that NBFCs in India have to face. Raising funds for growth has always been a challenge and in the initial years the banking sector was hesitant to lend to us. We could build a momentum only after ICICI Bank, and later Temasek, came on board in the early years of this millennium. However, we really managed to break out only after we had succeeded in attracting foreign private equity investment in 2007. After that, things were much smoother.

How do you face challenges that are emerging in the markets?

I believe that if you have chosen to be an entrepreneur, challenges have to be accepted as part and parcel of your life. I also think challenges are best faced when you are prepared to take the ups and downs with equanimity, and when you have a good team to back you up.

Manappuram is a now a well known brand. Can you please tell us more about the branding and Marketing strategy? How difficult was the execution of the branding exercise?

Manappuram began as a very local or regional brand, it was closely identified with the village of Valapad where it all began in 1949. When we began to expand  rapidly around 2007-08, we had two challenges to face. One was, of course, spreading the word about brand Manappuram. The other challenge was to win greater acceptance for gold loans in general, so that it would become a preferred option for customers, and not a last resort. Therefore, the marketing strategy was about promoting Manappuram and about promoting gold loans. And if you look at our television ad campaigns, we have succeeded in both our objectives.

The current strategy with major film stars, including Mohanlal and Akshay Kumar worked out well for Manappuram? What was in your mind when you started out with the campaign?

Until Manappuram’s example, the usual strategy followed was to invest in one credible brand ambassador  to talk to the whole country. The strategy of using regional brand ambassadors, who would then talk to the people in their own languages was actually a Manappuram innovation. We believed that a brand ambassador would carry greater credibility this way. That’s why we had Mohanlal in Kerala, Vikram in Tamil Nadu, Nagarjuna in AP and Puneeth Rajkumar in Karnataka before we signed on Akshay Kumar for northern India.

What is the current asset base of Manappuram Finance ? What is Manppuram headed for in the next 5 years?

Our gold loans portfolio stands at about Rs.11,000 crores. Over the next five years, I expect to see reasonable growth. Of course, there is a certain amount of uncertainty in the regulatory environment today that is weighing on the performance of gold loans NBFCs. However, I am confident that this is a short term phenomenon and it won’t be long before policy makers wake up to the full potential of gold loans, particularly in advancing financial inclusion.

Has the perception of Gold Loans changed in our society? Is the new generation thinking of Gold as a viable option?

There’s no doubt that perceptions are beginning to change in our society. The earlier idea that gold loans are a kind of distress loan is giving way to a more informed attitude. There’s now much greater recognition about the utility of gold loans especially when it comes to short term needs and as a bridge loan that allows you to honour commitments, or close a deal even when the long term funding is yet to be tied up.

Gold loan  has many advantages over other options like, personal loan, credit cards advance etc. Is the new generation aware of these facts?

As a matter of fact, until very recently, the younger generation was quite unaware of how gold loans could be of help with their financial needs. However, things are beginning to change, with greater publicity and with commercial banks also stepping and promoting gold loans being a risk-free loan.

Tell us more about Riti Jewellers? Is Riti changing the Jewellery business as Manappuram changed the Gold loan Business?

Riti Jewelry is the brand name owned by Manappuram Jewellers Ltd. We began with our first showroom in Valapad in March 2010. Since then, we have expanded across South India and today we have eighteen showrooms including eight in Bangalore city.  When we got into the retail jewellery business, our target was the middle class market, and our objective was to offer gold jewellery of the highest purity at the lowest making charges. From the very first day, we have been dealing only in BIS hallmarked gold

The recent 916+1 campaign has gone down well among customers? Can you tell us more about that?

The idea behind 916+1 campaign was to draw attention to the extra assurance about the purity of gold at Riti Jewelry, and in that sense the campaign has managed to create a stir. Incidentally, while the popularity of hallmarked gold has improved the quality of gold in the market, instances of sub-standard purity are still widespread.

Tell us more about the healthcare division MAcare? What are the future plans of MAcare?

Manappuram Health Care Ltd. (MAcare) is our foray into the affordable healthcare space. Our objective is to make diagnosis and treatment affordable to a wider cross-section of society using state of the art medical tools.  We have plans to launch a chain of Dental and Diagnostic clinics in the coming years. In fact, we have set up the most advanced facility of its kind, the MAcare International Diagnostic and Dental Clinic at Kaloor, with an investment of over Rs.17 crores.

Ultimately, we hope to make a difference to the healthcare space exactly in the way that Manappuram Finance has done wonders to gold loans, introducing professionalism and transparency to a traditional activity dominated by small, unorganised players.

Mr V P Nandakumar

MD & CEO of Manappuram Finance