Mr Jaiswal joined Magma after a successful 5-year stint from CRISIL where he spearheaded businesses of Risk Advisory, Risk Solutions, Research and SME Ratings. In his Risk Advisory stint with Crisil, he pioneered the implementation of Basel III with most banks, NBFCs in domestic and EEMEA region. Mr Jaiswal was an eminent member on SEBI committee of Corporate Bonds and Securitization Advisory Committee (CoBoSAC) and was also led consulting with the country’s foremost pension funds and regulators be it EPFO, PFRDA.
In an interaction with Mamta Maity, indiainfoline.com, Manish Jaiswal, CEO, Magma SME Business said, “We believe that the rural economy will show more resilience in current markets. Industries like manufacturing, infra, real estate which deploy semi-skilled or skilled worker segments will struggle before stabilising as many migrant workers will not come back quickly.”
How has the lockdown impacted MSME?
COVID-19 has been a black swan event and MSMEs among all other sectors have been badly affected. Magma conducted a customer survey among their MSMEs clients and found that almost 60% of our clients have resumed businesses, but are operating at 30% capacity. The exodus of migrant workers has been a challenge for resuming operations. Thus demand will also take some time to pick up. Most of the MSMEs believe that revenues are likely to decline by upward of 40% in FY21.
On the lending front, what measures are you taking to ensure smooth operations?
On the lending front the push by GOI under Atmanirbhar Bharat and the extension of the moratorium will help MSMEs tide this challenging situation. Given the fact that change is the only constant. COVID-19 is expected to change how businesses operate. We are increasingly relying on Going digital through agile technologies, getting asset-light and providing more opportunities for Work from home and reducing infra expenses wherever possible. In terms of easing the workflow, we have initiated Esign, E-NACH and various other API integrations in our Loan Origination System. Given our investments in analytical technologies and API integrations, Magma will be able to expand our distribution capabilities in the aftermath of COVID-19.
Once the lockdown lifts, which segments do you see driving growth?
To start with, all locations where the lockdown and mobility improves will be the first ones to bounce back. We believe that the rural economy will show more resilience in current markets. Industries like manufacturing, infra, real estate which deploy semi-skilled or skilled worker segments will struggle before stabilising as many migrant workers will not come back quickly. The cost of low skilled reskilled workers would spike the labour costs in the short run. The overall dynamics of lower raw material costs but higher labour costs would play out in FY21.
What will be the new normal?
Consumer confidence arising of long term stability and higher disposal income will be a key driver for pick-up in demand and the same will be contingent on vaccine discovery or low-cost COVID testing kits. Living with uncertainty will be the new normal for all businesses. Companies with low leverage, high agility are likely to fare better in the COVID Business test.
What is the digital push for Magma MSME biz?
We use Data Analytics at almost every step of business to support the customer business. Analytics is used in sourcing, underwriting, disbursals and collections. Our product teams deploy deep analytical technologies integrating vintages of external and internal data. We will continue to expand digitally as a way of life going ahead.