HSBC India Goes in for a Down-to-Earth Transformation
Tuesday, August 14, 2007
Think of HSBC Bank in India and you may have this impression of a stiff upper lip, British style-bank, with bankers attired in classy suits, catering to the high and mighty in clipped English accent! That’s an image undergoing change.
Chennai, Aug. 13. Think of HSBC Bank in India and you may have this impression of a stiff upper lip, British style-bank, with bankers attired in classy suits, catering to the high and mighty in clipped English accent! That’s an image undergoing change.
For a start, don’t be surprised if you hear these “foreign” bankers talk to you in your local language!
Ms Naina Lal Kidwai, the bank’s country head, India, puts across the transformation process more graphically. She says, “We have moved from being seen earlier as a bird of paradise ? so up there, sort of lucky if it touched you ? to a horse ? in the sense of being seen as vibrant, fast moving and strong. That’s a transition we have made with very strong marketing.”
Nowhere is this more evident than in the bank’s increasing focus on the small and medium enterprise segment as well as retail borrowers. “We are serving all ends of the spectrum,” says Ms Kidwai.
“We have coined a brand of products called HSBC Pragati Finance ? basically consumer finance. Today we are among the top three lenders in the country in this space. We are disbursing about 15,000 loans a month.”
And who is picking them up? Just about anyone from a small shop owner to a municipal sweeper or a housewife running a tiny enterprise out of her home to make ends meet. And these are often first-time borrowers from any organised lender, according to Ms Kidwai who registers both surprise and a slight sense of shock as she says this.
These small-ticket loans (less than Rs 50,000 per loan) are given without a security. Explains Ms Kidwai, “We have taken a view to giving it without collateral. What good is the security? What do we do with a durable like a scooter or television? We are really looking for the willingness to repay. Not too many banks lend unsecured loans of this order.”
It’s nearly a year since the consumer finance business was launched. And so far there have been no alarm bells. “If a borrower’s record improves with us, he or she will get lower interest rates,” says Ms Kidwai. Those rates are currently in the region of 32 per cent to 48 per cent per annum.
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