In an interview with BW Businessworld, Godrej Capital Chief Business Officer (CBO) Pankaj Gupta said the company is looking to reach 60 cities in the next 18 months, with assets under management (AUM) growing by Rs 30,000 crore by FY26. and Rs.50,000 crore by FY28.
Gupta said 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. Excerpts Edited:
Can you describe your experience in managing operations during the festive season? What techniques have you implemented in the past to ensure smooth operation?
The festive season presents a golden opportunity for small business owners to capture the bulk of their annual sales. At this time, micro, small and medium enterprises (MSMEs) have ample opportunity to capitalize on increased consumer demand and positive spending patterns by investing in the expansion and growth of their businesses. However, these businesses often struggle to obtain timely funding on favorable credit terms to invest in their operations.
As a non-banking financial institution offering tailor-made loans to meet the needs of MSMEs, we witness an increase in demand for capital at this time. We cater to this need through a strong network of over 2,500 channel partners across 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 time for loan disbursal. To raise awareness about our flexible loan features, such as ‘Design Your EMI’ (allowing borrowers to pay interest only for a selected period) or BizRewards (the flagship on-time repayment rewards programme), we have launched a digital marketing campaign. By focusing on both creating pull-through marketing and efficiently delivering customer flows, we’ve struck a fine balance.
What support is Godrej Capital offering to MSMEs and how does your company see the future of small sellers and MSMEs? Tell us how the Nirman platform helps SMEs raise funds and grow businesses. Any notable achievements you want to talk about?
MSMEs are vital to the Indian economy, contributing about 30 percent to the country’s total Gross Domestic Product (GDP). Along with Nirman, we have collaborated with multiple partner platforms and designed a comprehensive platform aimed at supporting the overall growth of MSMEs. Our partner network includes unique offerings from Amazon, GemTech Paras, Zolvit and MSMEx, among others, to address common challenges businesses face, from skills shortages to marketing hurdles and regulatory compliances. We aim to expand this network to ensure that MSMEs get the support they need at every step of their journey.
Indian MSMEs face various problems like high debt and delayed payments. How do you see the global demand for Indian SME products at present?
India’s MSME sector is a significant contributor to the country’s economy, providing millions of direct and indirect job opportunities and accounting for nearly 40 percent of exports. It is estimated that Indian MSME exports are likely to reach USD 1 trillion by FY27 Recent efforts by the government to promote SMEs have spurred growth and innovation, leading to increased international demand for Indian SME products.
Government of India initiatives like Make in India, Atmanirbhar Bharat and Digital India have created a favorable environment for SMEs, increasing their competitiveness in the global market. India’s diverse workforce, cultural heritage, and affordable products have also contributed to the growing global demand for Indian SME products. Further, ecommerce has enabled SMEs to reach beyond India’s borders, emphasizing the importance of regulations and infrastructure needed to enable digitization.
how do Godrej Capital To ensure that company operations remain robust and responsive to market dynamics during the festive season?
The credit sector in India is a highly competitive market. According to industry reports, the overall credit demand of MSMEs in India is around Rs 69.3 trillion, with a compound annual growth rate (CAGR) of 11.5 percent, while there is still a credit gap of around Rs 25 trillion.
As a late entrant to the marketplace, Godrej Capital aims to build on the trust that the ‘Godrej’ brand enjoys among Indians and design truly customer-centric and flexible loan products that enable customers to reach their potential. We believe this approach and customer-driven mindset enable us to stand out.
MSMEs that are not integrated with ecommerce platforms may find it more challenging to access the market. What is your opinion on this matter?
In today’s digitalized landscape, establishing a strong online presence is essential to expanding a business’s reach. The digital shift has provided MSMEs with unprecedented opportunities to scale their operations. Being present in prominent online marketplaces is crucial for MSMEs, as it increases their visibility to a large consumer base by enabling access to global markets. However, these businesses often face barriers such as limited adoption of industry standards, logistical challenges and lack of market insight.
Established global markets serve as gateways to valuable market intelligence and facilitate the global expansion of MSMEs. The pandemic has accelerated the growth of ecommerce, giving MSMEs the opportunity to expand rapidly, even in tier-two and three cities. Our strategy focuses on empowering MSMEs with the necessary tools and knowledge to use e-commerce platforms effectively. With 13 partners currently on board and ongoing expansion efforts, our aim is to ensure that every MSME can thrive in the digital marketplace and access a larger customer base.
While there are benefits for MSMEs from integrating with ecommerce platforms, for those unable to join, technology can represent a survival threat. How can these organizations solve this problem?
India’s fast-growing digital consumer market, with more than 900 million Internet users, presents an opportunity for transformation. While businesses have been inconsistent in adopting technology, this digital transformation could bring significant economic benefits and reshape the employment of millions of people.
For MSMEs, selling on ecommerce platforms opens the door to expanded reach, effective competition with larger peers and wider sales potential. These platforms offer advanced marketing tools and data analytics, improving audience targeting and sales strategies. Ecommerce also cuts down on middlemen and physical storefront costs.
Can you tell us what internal goals and strategies your company plans to adopt to drive growth in the future?
We are increasing 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 the rate for an initial three years before switching to a floating rate.
In the MSME segment, we have launched business loans and industrial loans against property offerings featuring innovations such as BizRewards, extended tenor and larger loan amount. An overdraft facility to support small businesses is in the works. We are further expanding construction to ensure support for MSMEs that goes beyond credit.
We aim 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 are strengthening our network targeting more than 10,000 partners in the next two to three years. Customer-centric innovations are the driving force behind our growth.