P
H Ravikumar has recently taken charge as managing director at Money Matters
Financial Services. At a time when the Indian economy is in the throes of a
slowdown and credit demand is tepid, NBFCs such as Money Matters has to watch
out for delinquencies. However, Ravikumar, who has been a banking and financial
sector veteran with over four decades of experience with stints at the Bank of
India, ICICI Bank and NCDEX is unfazed. In an interview, Ravikumar says that
loan demand from small and medium enterprises (SME) will continue to be strong
and the sector is poised for robust growth once economy picks up. Ravikumar
talks to Sanjeev Sharma about launching a real estate AMC, Money Matters’ name
change and expansion plans for Punjab and Haryana.
Q:
How do you see the market for SME portfolio in the current financial year? How
has been the demand for loans so far in the current fiscal year?
A: Small and medium enterprises have been the bulwark of both
services and industrial sectors. They are the largest exporters, largest
providers of employment, but have the least funding from the organised
financial sector. While the overall credit growth has been around 15 per cent
for the banking sector, the latent demand from small and medium enterprises for
funds from the organised sector will be manifold this figure. Even within the
SME segment, the small and micro industries have the least support from
organised financial sector. At Money Matters, the demand for loans has been
strong in the first quarter of fiscal 2014. Our total loan book currently
stands at around Rs 475 crore.
Q: How do you see the growth of the SME market in North India,
especially Punjab and Haryana?
A: Both these states have been the drivers of the SME growth in
the country. We see a steady growth at a compounded annual growth rate (CAGR)
of over 18 per cent-20 per cent in this sector notwithstanding what is
happening in the other parts of the economy currently. As the growth in the
economy picks up over the next few years, the SME sector will grow at a
compounded annual growth rate of well above 25 per cent. It is exactly for this
reason that we are expanding our footprint in these geographies. We plan to
open more offices in the two states based on our business growth and need to
tap this potential opportunity.
Q: What is your view on interest rates? Do you see room for more
rate cuts and by what extent?
A: Current macro trends —food inflation, current account deficit
and the consequent pressure on value of rupee vis-à-vis major international
currencies — seem to indicate that there is little room for interest rates to
come down. The pressure on the operating profit levels of banks, particularly
owing to level of stressed assets, also indicates that banks are unlikely to
reduce their rates of interest in the near future. Unless there is dramatic
improvement in the overall macroeconomic scenario, I do not see perceptible
reduction in interest rates in the near future.
Q: What are the new sectors you are looking to tap for lending?
A: Residential home loans, particularly in tier II and tier III
cities, revival of SMEs which are facing financial stress and specific
structured corporate loans are the major segments where there is a strong
latent demand for funds and can be tapped for lending.
Our current growth plans for the current calendar year can be
adequately met from our own net funds. We have no borrowings at present.
However, towards the end of the calendar year, we would raise funds of about Rs
250 crore to Rs 300 crore.
Q: Recently, Money Matters has entered into a strategic tie up
with Capri Capital Partners LLC. (CCPL). Can you share details of this
partnership?
A: CCPL is among the top one per cent of the funds - by
performance in the US in their segment. They have strong skills in raising
resources from various international markets and managing risks in the realty
sector. We have strong knowledge of the domestic real estate market. The
partnership envisages setting up of a real estate AMC which will manage
projects end to end subject to various approvals. The chairperson of CCPL will
also be joining the board of our company. We believe their skill sets
strengthen our growth in India. Besides, we are in the process of changing our
name to Capri Global Capital that will reflect our tie-up. While the Reserve
Bank of India nod has come as also the shareholders’ approval, we expect the
ROC approval for the name change over next two or three weeks.
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