It is well-acknowledged that micro, small, and medium enterprises (MSMEs) play an important role in the overall growth of the Indian economy and particularly, in equitable growth. According to data cited by SIDBI in its FY2018 annual report, MSMEs have contributed approximately 29 per cent to gross domestic product (GDP) in FY2017.¬¬Providing reliable access to efficient formal credit to MSMEs has long been challenging due to (a) inadequate formal data for credit assessment in case of informal, micro SMEs, (b) the lack of tailor made products to suit the borrower and lender risk profiles / appetite, (c) long turn-around times for granting loans, and (d) the requirement of collateral, guarantees, etc. required by most traditional lenders.
NBFCs have been significant credit providers to MSMEs especially at the lower end. Well established regional players with in-depth knowledge of micro markets and low-cost distribution provide access to credit to MSMEs beyond the tier I cities, while focusing on credit underwriting tailored to informal and smaller MSMEs.
The MSME lending segment has seen the maximum disruption through new business models including the evolution of fintech lenders seeking to use innovative approaches to credit underwriting and offering innovative products with a lower turn-around time.¬
In addition to the steady growth of specialised lenders, technology-enabled lending (fintech) has emerged as a major trend in recent times. Financial technology has disrupted the traditional lending process and made loans more accessible to the underserved and underbanked segments. Some of the emerging and fast growing names include companies like Capital Float, Clix Capital, LendingKart, SME Corner and Ugrow.
CONVENTIONAL FINANCIAL SERVICES COMPANIES – The rich experience and being in the market for over 10 years for any company is unparalleled. The understanding of the customer is deep and the insights are rich to leverage for a brand. However, digital lending companies are disrupting the market place and yet the same time competition in the form of traditional NBFC’s companies are also addressing similar audience. Hence the need for conventional NBFC’s to create a compelling brand story that not only helps position the brand in a distinctive manner but also sets to differentiate from the competition.
Some key questions to ask :
What is the compelling story the brand should narrate to various stakeholders? Why will the story be highly relevant and engaging to various audience we wish to address?
What is the stickiness factor attached to our story that resonates even days after looking at our communication?
Is there an insight that we can unearth from your brand and customer journey? What do customers sign-up for and what motivates and triggers them to engage with your company?
These are some of the key questions among many others that we need to articulate to develop a brand strategy and subsequently create a compelling brand narrative.
Every brand aspires to build thought leadership and shape perceptions of their customers. Brands want to have the ability to create a lot of positive associations and these associations build perceptions about who you are? what you do best? And why choose you over the others? It is these very associations that help you score very high or low on two most important metrics; relevance and differentiation.