Mr Sanjiv Bajaj, Chairman & Managing Director Bajaj Finserv Ltd expects intense competition in the consumer and merchant lending business in the top 100 cities as large groups enter the sector. Speaking at All India Management Association’s 8th National Leadership Conclave, Mr Bajaj said that the large groups have the advantage of ready and large customer bases. However, he argued that manufacturing and selling financial products takes time to learn, as there are no risk models that anyone can simply buy and implement.
‘Pricing is a game where anybody can beat you,’ Mr Bajaj said, adding that his company focuses on building capabilities that make it easier to take loan and invest. He explained that the backend algorithms of his company have risk scorecards of 61 million customers with pre-approval loans which can avail when they go to buy.
Talking about financial services scope of growth and its role in India’s economic growth, Mr Bajaj said that the financial sector in India must grow 2-3 times each year to support a 6%-6.5%% annual GDP growth, especially given the global headwinds. He argued that most of India’s current economic growth is funded by foreign capital, which is not reliable in the long run, and India must build local long-term sources of capital. ‘Today India is an attractive destination for capital, tomorrow it may not be,’ he cautioned.
On fintech’s role in formalizing the economy, Mr Bajaj said that his company adds 2.5-4.5 million Indians into formal finance each year, whose entry into the banking system comes through digital finance. He said that he plans to enter micro finance by 2025 extending the focus beyond the middle class, which is currently the biggest market for consumer finance.
Talking about the growing risk to data because of increasing digitalization of business, Mr Bajaj said that his group gets attacked a hundred times a day. He pointed out that a Russian hacker attack last year turned out to be superficial. ‘Cyber security is our foremost risk and our tech framework takes that into account,’ he said, adding that the company has created handoffs between databases so that a hacker can get access only upto a level.
Responding to the criticism of telecalling by Bajaj Finserv, Mr Bajaj assured that by next year the telecalling menace will be reduce to zero by using technology. ‘I get these calls as well,’ he conceded.
The conversation was moderated by Mr Sunil Kant Munjal, Chairman, Hero Enterprise.
National Management Conclave was live-streamed on AIMA’s social media channels and its recordings will be soon be available online.
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