Andromeda is India’s largest loan distributor. Over its 30 year old history, Andromeda has built an extensive brick and mortar network spanning 1500+ employees, 100+ locations, 200+ branches and a 3000+ strong partner network. In this interview, Mr V Swaminathan, CEO and founder of Andromeda talks about his journey ever since he founded Andromeda, his early day challenges and success mantras
Q. What propelled you to start Andromeda in 1991?
1991 was a watershed year for India. The government had ushered in several economic reforms to liberalise, privatise and globalise the economy. This was also the time when several foreign banks which had set up operations in India were starting to offer products like credit cards. Now, Indians were traditionally risk averse but in this new economic environment, I realised it was only a matter of time before people acquired a credit culture to finance their aspirational needs. It was in this context that I started Andromeda. I also realised that banks had limitations when it came to local market knowledge and needed trustworthy distributors. I had a vision of a company which would, over time, not only be a one-stop shop for any loan that a customer would want to take but also be a partner of choice for any bank that wants to offer retail loans in India.
Q. What were the biggest challenges you faced in the initial years?
The first few years were full of challenges. The first task was to hire the right people and train them to adapt to the work culture of the company. We were entering a nascent market with a strategy that hadn’t been tested earlier but yet I believed it had a lot of potential.
There were also other challenges like managing cash flows, meeting the expectations of partners, constantly attracting customers, and so on. However, the most difficult challenge in the business was to balance quantity with credit quality. It demanded a lot of patience and persistence. As those were the years, borrowers had no track record on credit information companies such as CIBIL which made risk assessment very difficult.
The company’s revenue was entirely dependent on our ability to source quality customers; we had to invariably keep the volumes coming in while providing our partner banks good credit quality. Our ability to achieve this quickly made us the preferred distributor for several banks and allowed us to scale up our operations rapidly.
Q. How do you see the Loan Distribution industry changing in the coming years?
We expect tremendous growth in the sector over the coming years. Retail lending in India as a percentage of GDP is less than 12%. This is low when compared with other countries in the developed world where this is upwards of 75% or even South-East Asia where this is above 40%. Such rapid growth can only be facilitated by using technology. This calls for superior distribution platforms to fulfil the demand for private consumption such as personal expenses, real estate, automobile, and credit cards. Also, I expect the MSME loans to achieve unprecedented growth with the government backing “Made in India” and “Vocal for Local” initiatives. As the lending industry rapidly digitizes, it has become imperative for loan distributors to align with these trends and transform digitally.
At Andromeda, our digital transformation journey comprise a re-branding exercise, building a central technology platform from scratch, using data and analytics extensively, developing a robust web-based front-end where partners and customers can interact seamlessly and also creating a strong communication strategy to convey these transformative elements to our stakeholders. This journey will enable Andromeda to become more scalable, process oriented, data rich and efficient apart being value accretive for the company.
Q. What has been your most successful strategy in market expansion as well as consolidation?
The most successful aspect of Andromeda’s market expansion has been the move to markets outside of Mumbai. While initially, we started off as a Mumbai centric entity, expanding to other locations gave us a head-start over other competitors while also increasing shoring up our volumes. Our innovative platform that is based on technology, digital and analytics integrates market data with real-time searches to instantly offer best deals to customers. Another aspect that works for us is our timely acquisitions of digital assets such as Apnapaisa.com. Partnering with smaller loan associates and providing them with a platform to access loans for their customers has also been an important growth engine for us.
Q. How do you keep your team motivated?
Keeping my team fired up and happy is my first priority.
I try to remain as open and approachable as possible. I make sure that my team members know that I’m very much a part of the team and not a “Boss”. They can reach me whenever they feel the need to. I do strive to make them feel that they are part of something bigger than the daily tasks that they are managing. Imbibing a sense of commitment makes them more inclined towards putting in their best. I also give them room to express their ideas freely.
Offering incentives is also a part of motivating my team. I believe in tailoring rewards for different team members based on their nature of the job. I understand the importance of developing close bonds with my employees.
Last but not the least, bringing in flexibility in the work schedule is very helpful. I do understand that everyone has their own personal life which they need to balance with their work lives. This is why I emphasize flexibility in working hours. I don’t want my employees to put up a struggle to maintain their work-life balance. Also, I do not believe in setting unrealistic goals. This, I would think, inspires my employees to give their best to any task at hand.
Q. What’s the best piece of advice you ever received?
The best piece of advice I ever received was – you are the average of the people you surround yourself with. If you want to be a great leader and a role model, be with people who exude such qualities. No matter how good you think you are, there’s always room for growth. Your personal and professional network goes hand-in-hand with what you want to be as an individual and a businessman.