Your neighbour bought a new iPhone X, Your cousin a new house and your friend his next car. All these calls for a celebration and I am sure you join the party or throw one. Just that in many cases there was an EMI that made it possible. To fuel our growing material needs, the financialization of the economy is happening rapidly. This time it’s not the banks but the NBFCs that have taken the lead.
Indian middle class continues to burgeon and the average spending power is increasing. We see ourselves surrounded by more cars and bikes on road. People are buying expensive phones, the sale of white goods increasing. Much of this is being facilitated by the increasing number of NBFCs in the Indian market.
Picture this, Indians bought about 11 million TV sets, 124 million smartphones, 26 million automobiles last year. Not to forget more than 20 million house appliances and 220,000 Houses to state a few. This is just a few of them that I have listed.
Also, the NPA scenarios with most of the leading banks and many famous bad debt situations are a reality. As a result, the banks have become much more cautious in lending out to individuals and MSMEs.
PE Firms and VCs have been bullish on NBFCs. There has been a spurt of funding and investments in many new companies. NBFCs have a certain start-up mindset advantage over banks. This helps them scale up lending effectively across their operations and customer target segments. Effective distribution is strongly penetrating tier 2, 3 and 4 towns. In addition, this is giving them the advantage of reaching out to a larger customer base.
Many large corporates with current business interests in Power, Steel, Automobile, Broking houses and others are setting up new NBFCs. They are focussed majorly on consumer lending using conventional and digital platforms. Individuals with decades of banking experiences are hiving off and setting up new NBFCs. Some of them are self-funded, to begin with, but will surely plan to raise capital in the future.
With all this background– it does sound like NBFC is the sunshine industry for talent. Seems like, how IT, Telecom, Insurance, eCommerce have been at different times earlier. A job in an NBFC was not considered all that glamorous few years back. But, now senior professionals are readily moving from banks to NBFCs.
We recently interviewed a senior candidate for a role in a new NBFC. He worked for an MNC bank and their star performer managing SME lending. But, he is more than eager to consider the role at NBFC. He feels that NBFCs are more aggressive, nimble and are leveraging the technology better to offer their solutions. Furthermore, since the war for talent is on – they are also able to pay better salaries at this stage.
Jobs @ NBFCs
There have been many high profile hires at some of the large NBFCs. Additionally, people have even joined start-ups which are yet to officially launch.
At any given point in time, a large NBFC in growth stage has between 250 – 300 positions open to hire. The total jobs created by NBFCs in India would be around 250,000 – 300,000 approximately. Most of these positions exist in Sales, Collections, Underwriting, and Risk.
Many companies are going digital in their offerings and there is an increase in demand for technology professionals. Therefore, roles like CTOs, Digital marketing, App development, UI/UX developers have opened up at NBFCs.
Most of all, there is a lot of focus on Tier 2, 3 cities to reach out to the under-penetrated rural market. NBFCs are spreading deeper through technology and creating employment opportunities in rural areas too. Hence, they also have been instrumental in creating massive front line jobs in tier 2,3 &4 cities.
Probably, NBFCs is the new e-commerce in terms of jobs creation. It is creating a massive opportunity for the entry-level jobs and significant senior-level opportunities.
Most of all, last 3 years have been a lull in the job market post the E-Commerce boom/bust. As a result, talent in the banking sector is in love with recruiters again. I don’t think either of them is complaining.