How a Job Interview Helped This Entrepreneur Start a Company Effective Immediately Suryoday today has about 28 bank branches and 213 microfinance doorstep centres. The gross portfolio of the bank is INR 2116 crore along with a deposit base of INR 957 crore

While working for a 9-5 job day in and day out, at some point in time – work becomes boring. There is an urge to quit everything and the need to experiment with life, career and etc.

Some prefer quitting their jobs to take a sabbatical, few take a break and travel to places. And then there are others – who quit everything for good to take up entrepreneurship.

R Bhaskar Babu was going through a similar phase in life however, he wasn't sure if it was the right time to start something on his own. However, a prospective job interview cleared his doubts.

During an interview at Aavishkaar Goodwell, Babu indicated Vineet Rai, the CEO of the company that he is looking at the opportunity with short-term perspective after which he plans to start a company. To which, Rai replied, "Why to wait for two years, why don't you start right now, I will fund your enterprise", and here is how Suryoday Microfinance was started in 2008 and rest followed.

Since then, the microfinance institution (MFI) has grown multifold and recently, the company received the Reserve Bank of India (RBI) nod to operate as a small finance bank (SFB).

Stepping Up

Discussing the vision for Suryoday's banking journey with Entrepreneur India, Babu says, "We are aiming to ensure financial inclusion of the unbanked and the underbanked segment, while ensuring wealth creation for our customers, sustained growth, deeper relationship and financial security at the household level."

However, upgrading from an MFI to SFB was not an easy task for Suryoday as the company had to adapt to additional parameters with regards compliance and governance.

Babu shares the key challenge was to ensure putting the processes in place, setting up a monitoring mechanism, getting the right team, developing IT infrastructure for banking and tech enablement for customer experience.

"In the first year, we had the basics in places, such as the integrated core banking systems, digital banking platform, a call centre, a good bouquet of liabilities and asset product offering and corporate internet banking platform," he added.

Additionally, the bank hasn't shied away from technology and digital disruption as it has invested its first year in building its IT infrastructure and applications.

For this year, the bank's focus is sales automation. Furthermore, to expand its offerings to the customer the Suryoday is also working with fintech to develop a portal for mutual funds.

Big Fishes v/s Small Fishes

Even with so many banks, NBFCs and MFIs, the penetration level of the financial services sector in India are very poor.

Basu isn't worried about the competition from other financial institutions as the entrepreneur-cum-banker believes that Suryoday has been catering to the underbanked segment as an MFI and hence, he plans to leverage on this customer base.

"We see a white space there since we have an established relationship with them already. The approach would be a comprehensive one, starting from financial literacy for the customers to help them save meaningfully. This would also be followed by digital literacy for self-service transactions along with doorstep delivery model to ensure excellent customer service and experience," he asserted.

Apart from improving its tech footprint this financial, the bank is also looking to diversify its portfolio by scaling up its retail assets and expanding the branch network.

"Currently the MFI contributes almost 90% to the bank portfolio. While on the other side, SME portfolio is crucial for diversification of assets and maintaining a healthy mix. So, from a better risk management perspective, growing the retail assets portfolio becomes important for the bank in the long run," he added.

Presently, the company is backed following marquee investors like IFC, IDFC Bank, TVS Capital, Shriram Growth Fund, HDFC Holdings, HDFC Life, ASK Pravi Group, Developing World Markets, Gaja Capital and Evolvence India Fund II.

To fuel its growth story, Suryoday is presently looking to raise INR 2 billion in the next six months from new and existing investors through a preferential issue as it plans to hit the capital market before the RBI deadline, which is 3 years from operation's commencements.

"As a new bank, we need a strong capital to manage any eventuality. We are also in the process of hiring an investment banker for the same," Babu said while sharing, "The Bank is well-capitalized now, and that the proposed fundraising would be towards risk management and safety capital and to support future growth. Its current capital adequacy is around 45 per cent."