It is like a mission for Mahindra Rural Housing Finance to create dwellings for the rural folk. Anuj Mehra, MD, explains the importance of customer trust that is the hallmark of the company:
N. Mohan: Mahindra Rural Housing Finance operates in a unique segment - rural India. Can you outline the advantages as well as disadvantages that you face? How has the company been able to overcome the disadvantages, especially through product design and customer education?
Anuj Mehra: Rather than advantages or disadvantages, I would like to describe opportunities and challenges of operating in rural India.
Rural housing finance is a very big opportunity. A KPMG report had mentioned that by 2022 the rural housing shortage would be 63-65 million units. Converted into a housing finance opportunity, this is a sizeable opportunity!
More importantly, the Mahindra Group has been operating in the rural markets and Mahindra Finance has been financing tractors and vehicles in rural India for the last 25 years. Thus, as a group we understand rural India, the rural customer and their needs and aspirations.
The large opportunity coupled with our strength (presence in and understanding of the rural markets), made rural housing finance a good strategic option.
Our challenges fall into 4 broad categories:
a. Customer acquisition related
b. Evaluation related
c. Product design
d. Customer Service
Customer Acquisition: There are no channel partners (like builders or DSAs) who can help identify customers for an HFC. Further, mass media also plays a limited role in this product category. As a result, the entire customer acquisition process has to be handled in-house. Typically, we begin the sourcing process by holding a meeting of villagers at a central location in the village. There, our team members explain our loan products, the requirements and the process. Customers evincing interest are then met separately and the process taken forward.
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