Muthoot Microfin Ltd: Micro-Financing Indian Dream for a Better Future

Mr. Sadaf Sayeed, CEO, Muthoot Microfin Ltd.

At the beginning of the twentieth century, Mahatma Gandhi said, ‘the soul of India lives in its villages.’ Though the percentage of rural India came down from 89% to today’s 69%, it is safe to say that the real India still lives in its villages and semiurban population.

And after seventy-five years of Independence, the biggest challenge faced by real/rural and semiurban India is inequality in the provision of basic needs to live a life of dignity, including financial inclusion.

Currently, out of the 1.35 billion (or 6.5%) people, over eighty million people still lives below the poverty line, which means surviving on the daily income of meagre ₹93.

This is where micro-finance ushers the rays of hope to bridge this ever-widening rural-urban divide. And Muthoot Microfin Ltd. is leading this mission to elevate India out of poverty and put it on the growth pedestal.

In an interview with CIOLook India for its edition of ‘League of Innovators – 2022,’ Mr Sadaf Sayeed, an enigmatic leader and the CEO, is speaking compassionately to achieve their goal of helping Indian families enhance their financial well-being and empowering the entrepreneurial spirit by mainly focusing on the women, the real transformers of the humanity.

Below are the highlights of this pathbreaking vision.

Describe your professional journey.

After completing my MBA in Finance and Marketing from Guru Gobind Singh Indraprastha University, I decided to pursue a career in the banking and financial services industry. Before joining Muthoot, I have worked with organisations such as HDFC Bank, GE Money, Spandana Sphoorty Financial Limited and Satin Creditcare Network Ltd.

Being passionate about the financial inclusion drive, I opted to head the microfinance business of Muthoot Pappachan Group in 2010. The microfinance business was started from scratch and emerged as the fifth largest microfinance company in India.

I am also the longest-serving Chief Executive for Muthoot Pappachan Group. And our company – Muthoot Microfin, has won several accolades, including Great Place to Work certification in the meantime. We have envisioned the company to become the most prominent microfinance institution in India by 2025.

Who inspires you to wake up every day and keep making a difference in the respective industry you are catering to?

The 190 million unbanked population and 8500 Muthoot Microfin employees working on a mission to eradicate poverty from India motivates me every day. The opportunity and the vast canvas of the financial inclusion landscape inspire me to think of new ideas and innovate to fill the gap between the have and the have nots, along with the opportunity to alleviate millions out of poverty and change the lives of many households.

As a leader of Muthoot Microfin, what challenges have you faced while establishing and running the business?

The challenges in establishing or running a business are continuous, and the secret of overcoming them is to invent solutions every day. Lately, the COVID-19 pandemic posed the biggest challenge for us, but we managed to overcome all three waves of the pandemic with a collective effort of all the employees and management.

We protected all our employees and maintained the business with minimal damage though our door-to-door collection process was hit hard. Despite this, MML registered a robust growth of 28% in AUM.

With systematic planning and a long-term approach, we have been managing risk and unsolicited instances such as COVID quite efficiently.

Brief us about Muthoot Microfin’s operations, mission, vision, and core values.

Muthoot Microfin offers micro-loans to women entrepreneurs from the remote rural sectors of India. Our operations are designed to promote entrepreneurship among women and financial inclusion.

Our financial inclusion drive aims to deliver financial services to the masses, including underprivileged and disadvantaged people, living in the rural sectors of the Indian society at affordable terms, in quick turnaround time and with hassle-free processing.

We have adopted the joint liability group model of microfinance, which caters exclusively to women in lower-income households and is premised on the fact that if such individuals are given access to credit, they will be able to identify new opportunities and supplement and grow their existing income.

Our vision is to become the most innovative and successful financial institution in India, serving the life cycle needs of the underserved. And our mission is to be the No. 1 microfinance company by 2025, managing the best portfolio quality, highest level of customer satisfaction and highest wallet share among our customers.

How has the current pandemic affected your business, and what steps have you taken to safeguard your employees while catering to your clients?

Microfinance is a touch-and-feel business. Our operations and collection of funds are all community oriented. Microfinance is one of the worst affected businesses during this pandemic.

However, we could resume the operations after the government of India categorised this industry as an essential service. Our competence and leadership in the market helped us survive the pandemic with minimal impact.

As far as the safety of our employees is concerned, we took all the necessary precautions for the wellbeing and safety of our workforce.

The staff from our head office individually called up the 7000 employees in the field and offered them all the help and guidance throughout the lockdown. The company ensured the much-needed emotional support to our employees during the period. We protected all our employees and paid them full salaries throughout the lockdown and pandemic. Further, employee loans were extended, and COVID vaccination reimbursements with paid leave were provided.

We also provided free online doctor consultations through video calls, chat, and phone calls for all the employees during the period and most of these services are still active.

What creative ways have you employed to make Muthoot Microfin’s work environment vibrant?

Muthoot Microfin has been a Great Place to Work certified company for the last four consecutive years. We won the certification for retaining a “high trust, high performance” culture in the organisation.

Muthoot Microfin considers employees as its greatest asset. As a Pan India organisation, our workforce is diverse, with people from different regions, ethnicities, traditions, and social structures working for a common cause.

To take care of our employees, especially during pandemic times, we availed the best insurance coverage to our staff, including special COVID protection policies.

Apart from healthy incentive schemes, we have plenty of employee recognition and rewards schemes to boost the morale of our employees. Every employee becomes an integral part of our company culture the moment they join the organisation. Our Internal and external communications always reflect employee contributions and recognitions.

We have quickly adopted the latest technologies to our business, making our employees’ work easy and more productive. Professional training is provided to all employees at regular intervals to ensure our workforce’s personal and professional development.

Our company’s values have been pivotal in grooming our culture for the well-being of employees. We are a “Purpose” driven organisation, which is the key factor in stimulating our daily work culture.

According to you, what are the essentials of being an innovative business leader?

As I mentioned above, coming out with solutions for continuous business challenges is an inevitable quality for any business leader. Further, an innovative business leader needs to think out of the box to lead his team, especially during troubled times.

They need to apply technology along with creativity to run the business in the modern era and always involve their team before taking critical decisions. Thinking and moving along market trends and inspiring a team is vital. A leader should be willing to take risks and ready to explore new opportunities.

What would you like to share with the young generation of entrepreneurs looking to step foot in a leadership role in their respective businesses?

My advice to the young entrepreneurs would be to hustle hard and stay focused irrespective of the size of the challenges they face and never give up. We live in a world filled with Volatility, Uncertainty, Complexities and Ambiguity (VUCA); businesses face challenges all the time, but only those businesses/entrepreneurs who do not give up and adapt to the changing environment survive and thrive.

As Jeff Bezos said on entrepreneurship, “You can be grinding for four years with no result and in the fifth year, it becomes the biggest thing on the planet,” Don’t be afraid of failing; keep hustling.

In terms of future growth, where do you see yourself and your company?

We have set our target to become the largest microfinance company in India. We have been growing phenomenally well in the last decade. The company will double its AUM to Rs 10,000 crore over the next two years, with an immediate target of Rs 6,200 crore AUM by March 2022.

We’ll also go for an IPO within a couple of years. The company will open around 500 branches in the near term and establish itself as the market leader.

Personally, my growth is aligned with the organisations. My core team at the organisation and I have a long vintage and enduring commitment to the company. Our promoters have always held us closer and have helped us grow with the company.

Being a continuous learner, I experience new things here every day, and of course, I can utilise the tons of experience I am gaining from this business. We are looking forward to a brighter future.