07. Zimmerman BIIA Conference vF to Present · 2017/10/7 · AUTO LOAN MTG LOAN PERSONAL LOAN...

BIIA Biennial Conference Bangkok, Thailand October 2017

Building an Infrastructure for a Truly Digital Economy and Financial Inclusion

India

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The Numbers


260M+Credit Active Consumers

India in Numbers

900M+15+ Years of Age; median age is 27

1BMobile Phone Connections

1.3BPopulation of India, 18% of the total world population;

33% is urban

1 of 2Countries with Advanced

Online Biometric DatabaseFinancial institutions

240+ banks, 100 FinTechs;500M+ bank accounts

10,000


The market share for non-bank finance companies has increased to 48%

-

200

400

600

800

1,000

1,200

1,400

Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416

NBFC & HFC OTHERSNBFC Market Share

43%

NBFC Market Share48%

Banking Environment

Source: TransUnion CIBIL Consumer Credit Database

Live

out

stan

ding

bal

ance

In b

illio

ns U

SD


6079

94 97 109

139 152

177207

247

310

In m

illion

s

Jan 2007.

Aug 2017.

Consumer Credit Growth Trajectory

Number of Consumers Present on the Credit Bureau Database


Slow pick up post credit squeeze in 2008

Robust growth led by focus on secured loans

Steady state growth with all product types displaying stable growth


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q106 Q406 Q307 Q208 Q109 Q409 Q310 Q211 Q112 Q412 Q313 Q214 Q115 Q415 Q316 Q217

AUTO LOAN MTG LOAN PERSONAL LOAN CONSUMER LOAN GOLD LOAN CREDIT CARD TWO‐WHEELER LOAN

45%

Source: TransUnion CIBIL Consumer Credit DatabaseLoan types not included in the graph above account for ~ 30% of all loans disbursed in a quarter.

UPDATE AS OF 31 JUNE 2017

Composition of New Accounts Opened


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q106 Q406 Q307 Q208 Q109 Q409 Q310 Q211 Q112 Q412 Q313 Q214 Q115 Q415 Q316 Q217

AUTO LOAN MTG LOAN PERSONAL LOAN CONSUMER LOAN CREDIT CARD TWO‐WHEELER LOAN

Source: TransUnion CIBIL Consumer Credit DatabaseLoan types not included in the graph above account for ~ 60%+ of all loans disbursed in a quarter.

UPDATE AS OF 31 JUNE 2017 – excludes GOLD LOANS

Composition of New Accounts Opened


5 3 5

9

15

22

27 31

-

5

10

15

20

25

30

Q20

7Q

307

Q40

7Q

108

Q20

8Q

308

Q40

8Q

109

Q20

9Q

309

Q40

9Q

110

Q21

0Q

310

Q41

0Q

111

Q21

1Q

311

Q41

1Q

112

Q21

2Q

312

Q41

2Q

113

Q21

3Q

313

Q41

3Q

114

Q21

4Q

314

Q41

4Q

115

Q21

5Q

315

Q41

5Q

116

Q21

6Q

316

Q41

6Q

117

Q21

7Q

317

DEFINED BY TRAJECTORY OF DEMAND FOR RETAIL LOANS

Consumer Credit Growth TrajectoryIn

milli

ons



7

4

7

13

18

24 26

0

5

10

15

20

25

Q20

7Q

307

Q40

7Q

108

Q20

8Q

308

Q40

8Q

109

Q20

9Q

309

Q40

9Q

110

Q21

0Q

310

Q41

0Q

111

Q21

1Q

311

Q41

1Q

112

Q21

2Q

312

Q41

2Q

113

Q21

3Q

313

Q41

3Q

114

Q21

4Q

314

Q41

4Q

115

Q21

5Q

315

Q41

5Q

116

Q21

6Q

316

Q41

6Q

117

Q21

7

In m

illion

s

DEFINED BY TRAJECTORY OF SUPPLY FOR RETAIL LOANS

Consumer Credit Growth Trajectory


Demonitization


0.0%

0.5%

1.0%1.5%

2.0%

2.5%

3.0%3.5%

4.0%

4.5%

5.0%

Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117

90+%

(a)

AUTO LOANS HOUSING LOANS PERSONAL LOANS CONSUMER LOANS CREDIT CARDS TWO‐WHEELER LOANS

Source: TransUnion CIBIL Consumer Credit DatabaseNOTE: NPA Rate measured by Outstanding Balance in 90+% (90 to 179) as ofSnapshot Date for all loan types excluding Mortgage. 90+% for Housing Loans & Property Loans calculated at 90 to 900 DPD

NPA continues to be low with quality of new vintage of origination typically better or at par with previous originations

Portfolio NPA


60M+ 30M+ 1.5M

Individuals seeking credit every year

Number of individuals unable to get credit

Number of individuals who had behavior similar to low risk

Trended credit information and more robust analytics can increase access to credit for this population

Increasing Supply

$10B+ in additional lending

But what about mass India?

$400B+

While virtually no one was looking, India created the

largest open API in the world


Building “Digital India”

Source: www.Forbes.comIndia's Tech Revolution Has Already Left The West Behind -- It's The Best Investment Opportunity Now by John Mauldin, April 2017

pre-2009Nearly ½ the population of India is undocumented

2012Phase 2Mobile Infrastructure, eKYC

2016Phase 4A New Payments System

2016Phase 6Demonitization

2014Phase 3Banking Adoption

2016Phase 5India Stack

2010Phase 1The Aadhaar Act


Aadhaar Numbers Issued

Adoption of Aadhaar

Source: IDinsight State of Aadhaar Report 2016-2017; May 2017

100210

510

720

930

1,100

0

200

400

600

800

1000

1200

2011 2012 2013 2014 2015 2016

62% CAGR

In th

ousa

nds

130

179177

217 236

290

391383

508

565

451

506

0

100

200

300

400

500

600

Apr'16

May'16

June'16

July'16

Aug'16

Sept'16

Oct'16

Nov'16

Dec'16

Jan'17

Feb'17

Mar'17

Authentications per Month



Source: adapted from www.Forbes.comIndia's Tech Revolution Has Already Left The West Behind -- It's The Best Investment Opportunity Now by John Mauldin, April 2017









Jan Dhan Yojanalaunched in August 2014

for comprehensive financial inclusion

Aadhar launched in 2010. Issued 1.1B+ Aadhaar in

just seven years

Pradhan Mantri MUDRA Yojana (PMMY) was

launched in 2015, 39M+accounts opened and $27B+ USD amount

sanctioned

Pradhan Mantri Jeevan Jyoti Bima Yojana was launched in

2015. Over 10M people enrolled in 1st month of

launch

Banking Adoption

Since Inception

300M Bank Accounts

opened

670BCash

Deposits

3.2B Overdraft

Guinness World Record

1.8M accounts opened in one week


The principle of JanDhan Aadhaar Mobile Trinity is that an individual’s Aadhaarnumber is linked to an active bank account for implementing cash transfers

The Power of JAM

Developing mobile based solutions to reach wider audience

Scores helping the emerging consumer have access to credit

Leveraging Aadhaarbiometric data to facilitate consumers having faster access to credit Name, Address, DOB, Gender,

mobile/email All 10 fingerprints Iris scan Photograph

Mobile Subscribers

1B+

Mobile Subscribers

1B+

Jandhanbank a/c300M+

Jandhanbank a/c300M+

AadhaarCard1.1B+


India Stack

Reference: Indiastack.org

PaperlessWhere digital records move with an individual's digital identity, eliminating the need for massive amounts of paper collection and storage

PresencelessWhere a universal biometric digital identity allows people to participate in any service from anywhere in the country

CashlessWhere a single interface to all the country's bank accounts and wallets enable the democratization of payments

ConsentWhich allows data to move freely and securely; on demand

PresencelessLayer

PaperlessLayer

CashlessLayer

ConsentLayer


What is the Impact?

People

Empowers all citizens to be “seen” and participate in the

formal economy

Institutions

Enables faster, more efficient and more accurate

decision making in both public and private sectors

Technology

Provides a robust technology infrastructure

that creates parity, reduces costs and drives innovation


The Experience


2+ days to open an account

Physical verification required

The Problem:

CASE STUDY: LEADING INDIAN PRIVATE BANK


The Solution

MOBILE APPLICATIONTablet-enabled application with pre-fill capabilities to accelerate the process and improve data quality

IDENTITY VERIFICATIONBiometric, one-time-password, geo-tagging and KYC solutions to verify the consumer’s identity quickly and seamlessly

DATA ACCESS & UNDERWRITINGLeveraged credit and non-credit data processed through a real-time decision engine to deliver an instant credit assessment

FINALIZATION & DISBURSEMENTImage upload, e-signature, document generation and integration to fulfillment systems resulting in an end-to-end solution

OFFER OPTIMIZATIONInteractive experience enables on-the-fly offer refinement and adjustments within pre-set thresholds


The Results:30% fewer manual reviews >80% reduction in processing timeInstant loan approvals in 15 minutes


The Future


will “Unlock Fortune” at the Bottom of the

Pyramid, which constitutes more than

900M Indians

Empowerment

digital economy will boost participation in

formal sector and help GDP growth

Universal Participation

standardization and easier execution,

while adhering to all necessary regulations

will promote aggressive Innovation

Continued Innovation

interactions, transactions, and

data exchanged in this ecosystem will

make India “data rich”

Data Poor to Data Rich

opportunity for volume-based and

profitable businesses leveraging digital

technology

Opportunity Creation

What Now?


Faceless

Data Driven

The Bank; Re-imagined

Advanced Algorithms

Paperless


The Lessons

“The right to privacy is protected as an intrinsic part of the right to life and personal liberty under Article 21 and as a part of the freedoms guaranteed

by Part III of the Constitution”


Key Takeaways

03Become Insights Rich

02

Challenge the Status Quo

Focus on the Customer Journey

04

Invest in the Core01

The story of the digitization of India is, if

nothing else, both inspiring and

impressive. It is a testament to what is

possible when a bold, clear vision is

delivered with near-flawless execution.

Find your breakthrough

Do something big

ExecuteGO

07. Zimmerman BIIA Conference vF to Present · 2017/10/7 · AUTO LOAN MTG LOAN PERSONAL LOAN...

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