Consumer finance - NBFCs (non-banking financial companies) are in some countries allowed to accept deposits and in some restricted only to the members of NBFC. Therefore the responsibility of the managements is not only to shareholder, but also depositors, suppliers, regulators, employees and government.
Financially is the NBFC might be not possible to be cash positive if we look on a balance sheet and do not separate cash from operation and working capital cash. Working capital is always needed to grow more and more - therefore it is a critical dofference to standard company, that can decrease the pressure by asking for longer payment terms, proving bank guarantee to suppliers so they can refinance it or even decrease the production time (delivery on time, quicker machines, less travelling of half-finished products). It is also more easy for standard company to get financing for working capital, as very bank branch understands the main setup and risks.
Being cash positive in operations in NBFC - look on following (and u need to achieve it for at least 2 years so investors or banks can trust u).
1. Work with NPL.....already in underwriting stage...learn from mistakes u have done and ask yourself once underwriting what mistake have we done last time and how similar it is to this new approval
2. Focus on profit .... and than adjust costs. It is more reasonable to give additional money or pay additional services from profit than taking them as costs. Reason being the the signalling & ability to pay in eyes of investors and banks
3. Offer value added to debtors. Make them feel they get loan, payment channel, discoint on products, insurance, deposit solution, savings, status, .... look for value. This way u will add more income.
4. Always focus on your COF...costs of fund . They are very much connected to your P&L. If it is good your options to get financing is broader and broader and therefore COF is lower and lower. In the end improving P&L more. It is a circle.
5. For new, more risky projects, consider a branch or daughter company, so u can easily cut it off from main one. Also u can tell invesotors to put money to mew project but not increase COF of working one
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