The Neon Show Understanding the trillion-dollar lending market in India with Rangarajan Krishnan, CEO, Five-Star Business Finance
Imagine you’re part of an NBFC, how would you lend to a person running a Kirana business? Without any proper credit score, current account or other standard checks.
Finding it difficult to evaluate the credit worthiness of the shop owner. Right? In the age of the internet, UPI, net banking, Jan Dhan Bank account and almost all transaction-related data available with transparency, it seems possible.
Now imagine dealing with the same issue, back in 1984. Seems impossible right?
Well, that’s when Five Star Business Finance, ventured into small business financing.
In this episode, we have with us, Rangarajan Krishnan, CEO, Five Star Business Finance.
Dive into this episode as Rangarajan shares the journey of Five Star, their experience of going IPO recently, how RBI regulates NBFCs, what differentiates them from other NBFCs, Banks Fintech, and more.
This episode is a must-listen for entrepreneurs, small business owners, and anyone looking to learn more about the working, valuation, and scaling of NBFCs in India.
Notes -
00:00 - Highlights of the conversation
01:28 - Intro to Rangarajan & Five Star Business Finance
02:38 - Valuation for NBFCs while going IPO
03:14 - Their IPO journey over three phases
10:29 - Private round valuation Pre-IPO
13:33 - History and background of Five Star
22:03 - RBI’s regulations around deposit-taking NBFCs
23:26 - How does the lending market in India looks like?
26:29 - The simplest way to define a customer of Five Star
31:51 - Branch presence across major geographies in India
37:10 - RBI scale-based regulations for 10,000+ NBFCs
39:45 - What differentiates them from other NBFCs?
42:41 - Do they aspire to be amongst the Top 10-15 NBFCs in the next 2-3 years?
44:11 - Prerequisites from RBI for starting an NBFC
46:16 - Do they want to become a Fintech eventually?
49:20 - Being a CEO and a Non-founder
51:39 - His interaction while joining Five Star
56:53 - Managing his & promotor's responsibilities
57:46 - Things he has changed & retained in the company in the last 7+ years