Proactively Going Direct to MSMEs: Magma Fincorp
In an exclusive interaction between Faiz Askari, Founder of SMEStreet and Mr. Manish Jaiswal, MD & CEO of Magma Housing Finance & SME Business, (Magma Fincorp) a lot has been unleashed and discussed regarding MSME Finance in the age of COVID-19.
While the last few months we are witnessing something which was never even imagined by generations. Last few months we have witnessed turbulence in economic activities across sectors. Having said this, we have also witnessed some proactive measures and strong plans by the policymakers which are designed to bring back the economy on track.
MSMEs are the chosen one sector for this recovery path as they are also the one who got struck by this pandemic the most. Well, the role of NBFCs has been very well understood and in the overall policy execution framework for MSME focused policies and schemes.
An engineer from VNIT, Nagpur and Manish has done his Fast Track General Management from IIM, Bangalore. With over 27 years of rich corporate experience and joined Magma after a very successful stint with CRISIL, Mr. Jaiswal has led Risk Advisory to both domestic as well as international banks and has been involved in the implementation of Basel III and strengthening Integrated Risk Management with leading Indian Private as well Public sector banks. Being an eminent member of SEBI committee of Corporate Bonds and Securitization Advisory Committee (CoBoSAC) & RBI’s Committee of Revitalisation of Distressed Assets, Mr. Jaiswal is also one of the most important connecting dots between the policymakers and the actual market.
Faiz Askari: How is MSME Finance evolving as we are advancing towards the Post COVID regime?
Manish Jaiswal: It is well accepted by everyone that the current pandemic situation is really tough for everyone. This is not a once a decade kind of situation but it is actually once a lifetime kind of situation where every one of us are experiencing this for the first time in our lives. It is time to sustain and survive for many businesses. In my opinion, FY 2021 will remain a year of survival. Having said that, the Post COVID scenario is also coming up. Entrepreneurs must remain focused towards creating a balance by staying grounded and realistic at the same time they must keep the hope of coming out of these times.
As an MSME lender, what are your observations on Govt’s efforts and plans for Economic recovery through MSMEs’ upliftment?
I must say that it is visible to me as a finance professional that the Government and policymakers have taken really strong and timely steps to rebuild the economy. Policymakers and RBI, in particular, have made very sincere efforts to reestablish the MSME credit availability. Proactive measures have been announced.
Liquidity has been made available in a considerable amount. Aatma Nirbhar Bharat Abhiyan is also planned extremely well as it helps in direct outreach to the beneficiary.
How is Magma Fincorp leveraging Govt Schemes and Programs in the interest of MSMEs?
Well, we have gone completely digital. Our end to end Credit disbursement process have become digital. From document collection to assessment to actual loan disbursement everything is digital now.
Since the lockdown was announced we made sure that customers should get contacted digitally, their documents should get received through scanned copies and every single communication should happen over digital mediums including the loan amount disbursal. Pandemics
Within a week or so we catered over 1000 customers under ECLG scheme. Infact, within a span of 15 days we were able to deliver MSME Credit support to over 2000 customers in July month itself. Overall we have over 6300 business customers we have from across sectors and across geographies.
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Can you share a glimpse of the process of Loan disbursement for ECLGS.
We approach our customers based on their pre-approval qualifications. Within 48 to 96 hours the money reaches the customer accounts.
What are the key parameters that you normally expect in an MSME who wish to avail financial support?
The only thumb rule we follow is to ensure the willingness and competitiveness of the customer. In terms of industry sectors, we focus on almost every sector, but these days sectors such as FMCG, Pharma, Consumer Goods, Nutraceuticals, and a host of other industries which are showing a great boost are welcomed by us. Industries that have strong cash flow requirements can become our customers.
Also, highlight your go-to-market strategy?
We are focused on ensuring reaching out to entrepreneurs who wish to enhance their working capital. We have 100 offices across India but our digital approach and fast decision making is making a strong impact on our customer outreach.
We are following the ‘Go Digital-Go Direct’ approach. Under this we are having an agile approach towards providing support to any MSME which needs money.