Muthoot Pappachan Group from Gold Loans to Blue League of Dreams

Muthoot Pappachan Group (MPG), a reputed business conglomerate has been providing solutions, services and expertise to millions of customers across the country in various domains like financial services, two-wheeler finance, micro-finance, affordable housing finance, health, life & general insurance, precious metals, automotive, realty, hospitality, IT- businesses and varied CSR-initiatives. Over the years, Muthoot Pappachan Group has grown to become a significant entity in the Indian business landscape. Group's customer-centric approach and innovation in terms of new products that cater to changing customer needs, have helped in gaining the loyalty of innumerable customers, as well as attracting new ones. With the credo of 'Empowering Human Ambitions' at its core, the Group adopts the latest technology and products & services innovations, towards catering to the needs of customers, based on deep understanding of the customers wants & desires, coupled with an uncompromising stand on values, principles and ethics.

Muthoot Fincorp Ltd., the flagship company of Muthoot Pappachan Group, is one of the leading NBFCs in India with over 3,500 retail branches, pan India. Muthoot Fincorp is a provider of products and services in the form of secured and unsecured loans to the middle and low-income customers. Decades of customer centricity, dedicated research and experience with the customers and their families have enabled the Company to provide quick and customized financing options and investment schemes for millions of customers. Muthoot Fincorp is one amongst the largest Gold Loan companies in India. At the same time the company has a diverse mix of retail offerings catering to the various needs of its customers including MSME Loan products, Housing Loan, Auto Loan, Money Transfer, Foreign Exchange, Insurance Services, Wealth Management Services and Travel-related services.

Mr. Thomas John Muthoot, Chairman & Managing Director, Muthoot Pappachan Group on the announcement said“Muthoot Pappachan Group is a pioneer of grassroots sporting movement in India. As a group, we believe in transforming the lives of the common man for better,  this is yet another initiative to help people realise their dreams.  As a business, we are constantly looking at developing products & servcies coupled with innovative technology to simplify the lives of the common man and empower them. India as a country breathes cricket and through ‘The Muthoot Blue League of Dreams’, we are facilitating a platform to help the marginalised talent demonstrate their sporting capabilities coupled with an opportunity to learn from the best talent in cricket.”

We spoke to Mr. Sanjeev Shukla Group CMO on the Vision of the company and the Initiative ‘Muthoot Blue League of Dreams’

“Cricket, football and Bollywood are the key youth touchpoints and as they say ‘art reflects society’, these have a real impact on the youth of the country. ‘The Muthoot Blue League of Dreams’ is a ‘first of its kind’ sporting & strategic marketing initiative conceptualised keeping these ideals in mind and with an aim to aid the youth with opportunities that help them not only realise their talent and promise but realise their dreams too- The dream to play alongside their favourite cricket idols. We are excited to launch the maiden season of our league and are looking forward to an exciting array of matches over the next few weeks.”

Elaborating further he said,   We are very proud and excited about this initiative, our vision was very clear how do we serve the common man, we wanted to reach out to the youth who are not privileged but have dreams and aspirations to play cricket. It was basically for youth in Tier 2 and 3 markets. We rolled out this initiative in the second week of April, and actually now when we think about it, it should have come to us much earlier because this is the customer we are talking to everyday. The passion is more with the young kids who cannot afford to play the game, the kids who have everything have no passion for the game as they are busy with their fancy gadgets but those kids on the streets who don’t have a place to play, don’t even have a bat are more passionate about the game. They play with bats handed down to them by somebody or from houses where their mother is a maid. We wanted to reach those kids and that’s how this whole initiative was rolled out.

The Group's Philosophy - Bottom of the pyramid opportunity can you please elaborate.

It’s the group’s vision to empower and enable human ambitions; we don’t see ourselves as a magic box where you enter as a rickshaw puller and walk out as a cab driver. We see human beings as people with spine, with ambition and aspirations. We are purely enabling them to achieve their dreams. That’s the reason we say we are servicing the people at the bottom of the pyramid, not from the perspective of what their mindset is but where they are right now. Their mindset has ambitions and aspirations and those are the people who come to us and we understand their needs, how determined they are and how committed they are and we kind of help them from the money perspective and the right advice. Then whatever they do is their own doing and their hard work we have only enabled them to do it. This is why we say we are transforming lives and empowering human ambitions.

After the split how has the group strategized its growth

The most interesting thing is the challenges and the opportunities. The group split into 4, there were 4 brothers it was a mutual decision, and there was no other reason. The group split in 1979, nearly 4 decades now. The 2 prominent businesses Red and Blue are competing in the same space i.e. in the Gold loan space and it is very amicable. So beyond this the most interesting part is we are far more diversified now, from being a purely a Gold loan company in 1979. We have 3 5* hotels in Kerala, Real Estate, Technology Company, Security Company, Micro Finance, Savings, Loans for 2 Wheelers and Used Cars. We have 18-19 Companies now and by the way Red Muthoot and Mannapuram gold Loan Company avail the services for our Security Company which is into Intelligence and Surveillance Technology based and they are experts in this space.

The reason behind the Color Blue and what is its significance?

Personally speaking I don’t know if it is a co-incidence but I also love the colour Blue, before I joined the company I went thru their website, no corporate company says ‘By God’s Grace’, talks about amicable settlement, how we co-exist and how people have been kind etc unlike any other corporate and the colour BLUE stands for that. The colour BLUE is all about somberness, solemnness, all encompassing. Most importantly everything we do and the businesses we have are all about our customers and for us the colour BLUE is all about trust, it’s the colour of the Sky and the water, 2 things that we stand for enabling human ambitions and we can only enable them if there is mutual trust. So the colour BLUE stands for Trust and Ambition. Like Richard Bach, wrote about in Jonathan Livingstone, it’s all about the sky, all about flying. Hence the Colour BLUE

Muthoot started off as a local brand in Kerala today you are a Global brand - your thoughts

The strategy is very simple, we are not global but spread pan India. When this company started 131 years ago, Mr. Muthoot was trading in Vegetables and other things, there were large estates which the British ran and there were Indian labourers working in these estates, and after a period of time the British Estate owners realized, we need to give the due credit for this, the salary was being squandered away in drinking/gambling etc so they asked Mr. Muthoot on how he can help these labourers save their money, that’s when the chit fund thing started, but the aim was to help these people to save for emergencies. Our complete strategy revolves around the needs, ambitions and aspirations of these simple folks. So the company started with Gold Loans, small business loans, we give business loans of 50-60 thousand, it is for the simple man to change his life, upgrade his life. All they need is available with us, we are also into Money transfers and Forex exchange and most importantly Insurance, Health Insurance which has been developed as per their perspective.

We call ourselves Community Bankers, both from a production services to the feeling that we work with our customers.

How is the group perceived in the Tier 2/3 markets?

The country is really big and I don’t want to generalize it, across the South of India we have penetrated these markets, its relationship based most come to us because they know the person in the branch, when asked why Muthoot they have no answer, so it’s not cold calculated reasoning behind this, its inherent trust built over a period of time.

Trust is one thing which can’t be taken for granted and needs working and that is what we are doing.

Advertising Strategy - how much or what % of spends on digital advertising and regional advertising?

Digital is purely from 2 perspectives, the targeting of the young, they too need money, even if they are working in IT companies, it’s not only the people at the bottom of the pyramid need money but also these youngsters. Everybody is looking at profits, we are not a charitable organization but we will never create a situation where our customer will get into a debt trap. We advise our customers on how much loan they should take.

These young people are not really connected to us, so we want to use the digital space to slowly reach out to these people, understand them better and in the near future have more products and services which will talk to them.

It’s aligned with the overall industry, in some cases 8-10% but largely if you look at the overall space in the country it is about 3-4%, which is where we are.

What Digital means to us it is a technology for reaching to people, serving them better, responding faster etc. We are very very close to that technology and very excited about it. One of the key points of our going forward strategy is Digital transformation overall and as per me digital marketing is a very small part of it. We are fully committed to digital transformation.

Is there a major stress on regional advertising other than English?   

For us it is not only regional but branch wise communication to reach out to customers, we have about 3600 branches in 20 states, it’s not about one state to another or one region to another but one branch to another branch as each branch has a different set of customers. As I travelled and visited the branches there is a small India within every branch and our stress is how we talk to our customers and understand their needs, our communication is tweaked as per their needs. For us it’s not regional but hyper local

Is this the reason ’The Muthoot Blue league' The Journey of Dreams campaign roped in cricketing greats Jhonty Rhodes, Herschelle Gibbs and Brett Lee and Zaheer Khan.

That was a stroke of genius and it was the agency’s idea. It was a continuous thought process and we were discussing as to how to get these people live their dreams and ambitions and the agency came up with these 4 names.

We are enabling them and can they even imagine to be playing cricket with these legends, I cant.

There are teams of drivers/ peons who after a full day’s work play cricket in the night. There are teams who put their mobile phones on rent, go play matches and take their phones back by paying with the prize money they win. There are many teams like this across the country. It’s all about understanding the sentiments of the people, and the strategies come out from the people it’s not ours.

How has this initiative created a greater connect with the Brand?

Is this going to be a continuous effort?

It comes out of the brand value and anything like this creates a great connect with the brand. This is the first edition launched in April, we have had 1200 teams registering for this initiative, with no TV/Print/Radio advertising and no celebrity but purely Digital, evidence that it is connecting to people at that level, the youth at that level. The last I checked there are some teams which have got 18,000 – 20,000 votes. Imagine if each of these teams get say 1000 votes x 1200 teams is 1.2 million votes, that means so many people have been touched and they decided to go on the web site and vote for these teams. We have used the digital mediums to connect with people i.e Mobile, Web, What’s App.

Yes, as I said this is only the first edition.

Muthoot Pappachan group's overall performance in FY 2017 - 2018?

By God’s grace it has been good, there is huge potential, we are coming up with new products, the 2 wheeler loans which others meaning our key competitors don’t offer, they are mainly into gold loans, we are far more diversified. We just launched some branches in Guwahati for the first time. We are opening new frontiers. The whole of East and North East nobody has bothered to go there, there are small small enterprises, fishing/Tea Estate Workers, and everybody is a trader, not necessarily having a job. All those people want an avenue to get some money, to buy something or to save in a simple manor. Our ability to reach out to people is our USP and not ruled or dictated by economics.

You have recently bought in L&K Saatchi, Text 100 for PR and Havas Media for Media Buying, the strategy behind this move

It’s a professional approach to the business. It was done at a ingenuity level till now, its very easy to do communication when you have an established brand. From a marketing point of view it is better to get a science behind the strategies and we want to reach out to people.

Secondly we are not a MNC or a big corporate, we don’t have that kind of monies, we need to be more cost effective for which you need to invest to save a lot more, left to me I would spend in various things but will have no control on who it reaches to, that is why you need professionals. Though it is seen as something fancy its actually the opposite as this helps us to reach out to people more effectively.

For most people in Media we are a small company just dealing with Gold Loans in Kerala, but we have 3600 branches across the country, and thru Micro Finance we have 1.3 million women we are associated with and who are leading a life and earning their livelihood with us. As most don’t know about this we decided to tell them and that is the reason we have got them on board.

What would be the key focus areas for the group in the next 5 years? What factors AND markets would be the growth drivers for the group?

Key focus areas in the next 5 years is simply expanding in the North/East and North East, West we are more or less established. We are expanding beyond the south markets. Expansion not only in terms of the business but a tangible expansion, it is also about the expansion of the foot print of the brand. We are a National brand and we want to be known as a National player that should be a reflex reaction and not Oh I see, we don’t want this to happen. We are far bigger than many others but that is not reflected pan India level. Our other focus is we want to reach out to the young people and they have the same experience as their parents & grandparents and they shouldn’t rely on European and multi-national banks as they don’t understand the sentiments of the people and we want to reach out to them.

Third of course is Technology and digitization is really a huge road map for us. Recently we have bought a few startups and invested in them as an organization. There are Digital based platforms like Faircent and Remit Guru which are purely digital enterprises were we have invested in. this is just a reflection of where we want to be in the mid – term and long – term.

Insight on the overall growth of the financial institutions in India. What are the challenges to this industry? What are the growth opportunities?

Non-Banking Financial Companies which we are part of is growing very fast and we have progressed because we have stayed and stuck to our knitting’s, those who haven’t have collapsed. Its not about the size but to remain local. If you serve your constituency well, the parallel I draw is to a politician, as long as He or She stay focused and serve their constituency well and they know that when they come back to their constituency no matter what or who they will get elected every 5 years, every party knows that and it guarantees that one seat in the parliament. It is like that if you stay close to your constituency and your franchise, one you will find more avenues to serve them so more avenues for business and secondly you will never burn your fingers elsewhere as you know your customers. The growth for many NBFC’s and also for many which haven’t grown is because we have stayed close to our knitting’s, know our franchise and know our customers, there needs and wants, how much they will pay and not pay, for eg, I give an X amount of money to somebody who can only afford to pay X -5 and then he or she defaults then it becomes a Non Performing Asset for me, who is to blame?? So when we have a customer who has the ability to pay X 5 then only that much is given.

These are little things, its not rocket science but staying close to and knowing the people you are serving.

The challenges are limited by our own investments required in the Brick and Mortar expansion as most people are not necessarily digitally savvy though digital has reached out to many in villages but that’s not what they use for transactions as they are not very comfortable with it. Reaching out to people is the biggest challenge and I think the country has also to open out to a certain extent. There are challenges in the regulation front as well but this keeps us in check.

Though a NBFC interest is higher than a regular bank people prefer taking a loan from us is because of the ease in which a customer gets his loan and however small he is we treat him as a King.

Now with LK Satchi, Hawas in place what will be your marketing strategy?

The first proof of the pudding was the Blue League initiative, and the importance of reaching out to the people on the services and products we have to offer. We want people to differentiate between the RED and the BLUE, not because we are against them but we are in the same business. Its strategically it is important for us to be seen as two different entities.  We are in the same business, similar name so strategically we need to stand out as an individual entity.

The strategic challenge of reaching out to the youth, reaching out to people, a company from down South reaching out to people in Punjab/Delhi/East and telling them we are one of you and the company is yours. It’s not about fancy ads on TV etc. That will happen over a period of time.  We will employ whatever strategies we need to; the League of Dreams is the first step to get there. The goal post is that and not becoming a big brand.

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