"In Manappuram, learning is a way of life” - VP Nandakumar

Manappuram Finance Ltd is a leading non-banking financial institution that comes first in the minds of Malayalis when thinking about gold loans. After all, who can forget Manappuram’s iconic advertisement, “Veetil swarnam vechittenthinu naattil kenu nadappoo” featuring Malayalam superstar Mohanlal.

Founded in 1949 at Valapad in Thrissur district by VC Padmanabhan, Manappuram has gained the trust of thousands of customers. Under Padmanabhan’s son, VP Nandakumar, Manappuram Finance Ltd has become a prestigious institution with more than 5,300 branches across the country having around 44,000 employees. Today, Manappuram has assets worth Rs 31,000 crore.

Apart from gold loans, Manappuram offers services like SME finance, Forex and Money transfer, vehicle loans, personal loans, micro home finance, etc. Manappuram Home Finance Ltd, Manappuram Insurance Brokers Ltd, Asirvad Microfinance Ltd, and Manappuram Comptech and Consultants Ltd are the subsidiaries.

Earlier this month, Brand Stories met Mr. VP Nandakumar, the MD & CEO of Manappuram Finance Ltd. Here are the edited excerpts from the conversation:

There have been many a winning strategy over the years but I would like to highlight one that worked even beyond our expectations. This initiative came during the 2009-2010 period. This was the time when we had received private equity and enough debt from various banks. We wanted to open more branches across the country.
When we open a branch, there is a gestation period before we can break even or achieve profit in our business. But if we can bring down this gestation period, we can make gains. When we open a branch in a place where we are not known, it takes a longer gestation period. In those days, we were not known at the national level and I was thinking of how to tackle this problem.
I knew that to do well in any geographical region, our brand needs to be recognised as a local player there and not just as a Kerala company or a national company. So, we decided to recruit brand ambassadors to represent the company in each region. For instance, just the same way as Mohanlal has a certain brand value in Kerala, Puneet Rajkumar has a good following in Karnataka and Vikram in Tamil Nadu. In the Hindi belt, of course, we decided to sign up Akshay Kumar. In all, we identified eight stars to represent Manappuram in various regions across the country.
The profit for the previous year was Rs 120 crore while the profit budgeted for the following year was Rs 230 crore, without factoring in the actual cost of Rs 130 crore that would be incurred for the planned branding and advertising campaign. When the ad budget was presented, the board was apprehensive how a profit of Rs 230 crore could be achieved if we spend Rs 130 crore for the ad campaign alone. They reluctantly accepted the proposal on the assurance that they would be convinced through a monthly performance appraisal. To their surprise, we could report a profit of over Rs 300 crore during the year. And, Manappuram Finance became a household name cutting across regions.
Priyadarshan, the renowned filmmaker, was drafted in to direct the TV commercial. During our discussion, I told him how even those who possessed gold used to borrow money at cut-throat rates from the unorganised market instead of going to an organised lender who would have charged a reasonable rate. The famous jingle, “Veetil swarnam vechittenthinu naattil kenu nadappoo,” was coined as a result of this discussion.

1. Can you mention some of the key brand-building strategies behind Manappuram’s growth and success?

There have been many a winning strategy over the years but I would like to highlight one that worked even beyond our expectations. This initiative came during the 2009-2010 period. This was the time when we had received private equity and enough debt from various banks. We wanted to open more branches across the country.
When we open a branch, there is a gestation period before we can break even or achieve profit in our business. But if we can bring down this gestation period, we can make gains. When we open a branch in a place where we are not known, it takes a longer gestation period. In those days, we were not known at the national level and I was thinking of how to tackle this problem.
I knew that to do well in any geographical region, our brand needs to be recognised as a local player there and not just as a Kerala company or a national company. So, we decided to recruit brand ambassadors to represent the company in each region. For instance, just the same way as Mohanlal has a certain brand value in Kerala, Puneet Rajkumar has a good following in Karnataka and Vikram in Tamil Nadu. In the Hindi belt, of course, we decided to sign up Akshay Kumar. In all, we identified eight stars to represent Manappuram in various regions across the country.
The profit for the previous year was Rs 120 crore while the profit budgeted for the following year was Rs 230 crore, without factoring in the actual cost of Rs 130 crore that would be incurred for the planned branding and advertising campaign. When the ad budget was presented, the board was apprehensive how a profit of Rs 230 crore could be achieved if we spend Rs 130 crore for the ad campaign alone. They reluctantly accepted the proposal on the assurance that they would be convinced through a monthly performance appraisal. To their surprise, we could report a profit of over Rs 300 crore during the year. And, Manappuram Finance became a household name cutting across regions.
Priyadarshan, the renowned filmmaker, was drafted in to direct the TV commercial. During our discussion, I told him how even those who possessed gold used to borrow money at cut-throat rates from the unorganised market instead of going to an organised lender who would have charged a reasonable rate. The famous jingle, “Veetil swarnam vechittenthinu naattil kenu nadappoo,” was coined as a result of this discussion.

2. What is being done to motivate employees to ensure higher productivity?

In Manappuram, learning is a way of life. Those who came in as matriculates have gone on to take MBA degrees at the company’s cost – we provide them both time and money. We have our own online training platform, that was developed in-house, called MADU. Hundreds of employees get MBAs, LLBs, BTechs and so on. We have tied up with premier institutes like BITS Pilani and Bharathiyar University to facilitate employees to continue their education. We also send our employees for training to various IIMs and reputed foreign universities for enhancing their knowledge and confidence. We reward their academic achievements by giving them promotions and increased responsibilities. By giving them such exposure, we empower them to face the world.

3. You dedicated your life to Manappuram. What were the policies that you followed to scale up the company? 

It is simple. I always try to closely observe the market and enter the market at the right time. I take risks but at the same time, I manage the risk by learning continuously about the market.

4. Can you explain the critical turning points in Manappuram’s growth?

The first was listing the company way back in 1995 in the premier stock exchanges. We went for it at a time when knowledge about the capital market was not high, especially in Kerala. There were many other firsts. We were the first company in our sector to register with the Reserve Bank of India. We were the first to be allowed to get NRI deposits. We were also the first company to raise FDI in any industry in Kerala. We also got credit rating from leading credit rating agencies. These pioneering efforts gave us an advantage along with the branding exercise that I had referred to earlier.

5. What were the main challenges faced by you and how did you overcome those?

In the field of NBFCs, the regulatory framework took time to evolve and mature. Many of the large NBFCs had to exit the market. Doubts were cast about every company. As a result, there were many challenges, particularly on the liability side. But we overcame these by virtue of our sheer transparency, commitment and several pioneering initiatives.

6. What is the number of current employees and the AUM of the company?

We have around 44,000 employees all over the country and 5300 branches across India. Our Assets Under management (AUM) stands at Rs 31,000 crore as of now.

7. How important is customer satisfaction and service? What are the policies adopted for it?

Customer is really the king and without the customer’s satisfaction, no company can either exist or thrive. One important aspect of any business is service delivery and for this, Turn Around Time should be low and cost affordable. We adopted cutting-edge technology to deploy services such as online gold loan and doorstep gold loan. Once the customer has pledged the gold in a branch, he/she can transact from anywhere in the world. If a customer is unable to come to the branch, we go to his house and deliver. We have designed several products according to the customers’ needs. Through our microfinance subsidiary, we have been empowering women. In all our businesses including housing finance, vehicle finance, etc, customer is at the centre of it all.