Well, so much work is debatable, I have filled in a lot of blanks using experience
Like one of my coaches said – better to be appx right than to be precisely wrong
- They define ideal customer with a certain kind of loan type with a certain type of collateral plus their competition is money lenders, they are after customer with a higher income and collateral profile compared to a typical microfinance candidate. Everybody ends up with certain niches and learned experience over long periods of time, these guys have this - Fast moving lending practices niche
Combination (Low Ticket Size + Higher Interest + Own House + Low LTV% + 12-24 month duration + Competition is not other NBFCs, it is primarily moneylenders)
The above combination almost is a recipe for higher interest margins
Local player entering the market = These guys have grown and have maintained these NIMs consistently, they have a secret sauce which can only come from Deep Focus and Territorial Understanding which is not easy to replicate for a larger entity
Will there be other competitors, I am sure there will be, but my sense after looking at their history is that these guys are just better operators and they are making sure they are not competing against other sophisticated players
- They have an edge in the markets they operate in, I would want them to continue in these states because they seem to have enough headroom to grow, I do not know about their intentions but I am sure they are interested in growing, with this kind of a management I would rather let them take a call, they have done well without our suggestions