Nava Chakras of Rural Finance Part 3 of 4

AGNA -                                               Awareness / Red Flags

" The Intuition"

Facial expressions and show of emotions are by far the best indicators of intentions. Many a time these are quick, short or even subtle. Yet the trained eye is able to capture these.

Just like finger print types, we need to be aware of NAVA BHAVAS which fall within the ambit of this Chakra. Ability to spot these quickly and intuitively during conversations and discussions is the key behind using this technique.

To explain this further, the best segment of customers are SHG (Self Help Groups) and EC / MSME ( Enterprise Credit / Micro, Small & Medium Enterprises ). These customers are less veiled than the other customers who do get trained to hide their emotions. While techniques have been developed for such customers as well, we take examples from SHG / EC / MSME, to highlight that these emotions are not theories but experiences from actual scenarios.

EXCESSIVE PASSION / AGRESSION          

“The enemy is within the gates; it is with our own luxury, our own folly, our own criminality that we have to contend.” 

It is very good to be focused or passionate about what one does. Yet, the line where passion becomes a gamble is a very thin line. Passion when harnessed and spread over a longer tenure of time, yields good returns.

When anyone talks very passionately about growing / molting aggressively, in a short time frame, it does not exhibit passion, but exhibits greed to grow.

This is maximum exhibited in SHGs who take Rs. 60000/- initially and parrallely state that they would like to take Rs. 250000/- the next year and thereafter Rs. 500000/-. This in itself is a trigger that warrants any financier to take steps prudently. The entire business of SHG is about risk taking and organizing your collections. Yet, the goal of the group is towards Rs. 500000/- and the highlight is that this group got its Rs. 500000/- in the second year itself. In the year in which it was taken the group could manage itself properly. Yet thereafter, they had repayment issues.

The indications do come across loud and clear. Based on ability and capability, irrespective of fitment or product capability, the executive assessing the SHG should peg the exposure that would be ideal and recoverable - that which would be win win for both parties.  

 

COMEDY / JOVIAL

" There's pain in Laughter "

One of my early experiences on this front was with a Kirana Shop Owner. We ( 4 of us - 3 executives (locals) and myself) went to evaluate the onwer of the Kirana Shop for a loan facility he had requested. He was a gregarious man and had a hearty laugh. Typical pan chewing and shrewd. During our interactions with him for a finance offering he was smiling and jovial in his responses to my executives. My executives also were personally bowled over by his smile and aura that he had created. The executives were answering to questions / queries / clarifications raised by me.

At one stage, I asked my executives to stop answering and asked the owner himself about license for his shop, goods being traded, performance / profits etc. He said, " Yahaan ke bachche bhi jante hain yeh dukaan " ( Even the small kids know about this shop) - indicating how long it had been in operation, with his classic smile. I recorded what was given to me and then left.

I came back within 2 - 3 days without any body accompanying me and met the owner again. Over a cup of tea, we had a man-to-man talk where, with his permission, I asked him questions for which responses were needed from him with documentation. He was the same smiling self. Yet at the end of the assessment he observed - " You are not what you seem. You got your clarifications. I like the focus ! " he said. The answers he gave were far away from the picture showcased on the first instance. I could understand in that discussion the depth of issues that the customer / owner was handling. The finance was provided but exposure was reduced. 

 

PITY / SYMPATHY

" we may even find ourselves sympathizing with someone else's opinion, even though at some level we feel like we disagree with them"

While there are customers / people who pity / sympathize with us and are capable of capitalizing this emotion exhibited towards achieving an ulterior motive. The skills of these strata / type of people is the ability to RATIONALIZE and establish a connect.

I recollect a Mortgage case, wherein the borrower had found out that the branch manager's wife was ailing from a terminal illness. On every visit, he would enquire about her health and offer "PRASADAM" - (A devotional offering made to a god, typically consisting of food that is later shared among devotees.) This would invariably leave the Branch Manager in a tongue tied situation and we were unable to do any hard talking.

This is true even ahead of lending. We found an instance where the customer sympathized with our executive for travelling in the sweltering heat on his account. He pitied our executive and assured him to get the relevant documents readied and reach it to us. The executive gladly accepted. The documents reached and was put up for loan processing. The documents provided were found to be fradulent during sampling.

 

ANGER / FURIOUS

"The Paradox of Anger: Strength or Weakness?"

This is a classic reaction exhibited by customers / borrowers - who are harbouring anxiety / threat perception / feeling of isolation / feeling of being unheard / feeling of unfair deal / fear.

This reaction warrants at least 2 rounds of interactions. Why ?

1.      Anger on a one-off occasion is understandable, and quite plausible, however the same emotion over multiple visits is a warning signal of some undisclosed information. This is typically a business call. However the risk perspective would be – “abstain” !

 2.      Anger if explained, and genesis identified – is acceptable. However, it takes at least 2 visits to actually ascertain if the true cause of Anger has been correctly identified.

 3.      Anger, especially in SHG, is a warning signal of discord between members or with NGO or terms of finance. Immediate checks in such cases would warrant checks in the areas of :

 a.      Homogeneity of the group and group members

b.     The Loan withdrawn by members – extent and number of times

c.      Methodical recording – Discord or disjoint meetings are rarely recorded. So if the records are in order, it is a 70% assurance that disconnects of any kind are sorted out.

d.     Usance of the last amount and the extent of support from NGO in governance.

4.      Anger, more than anything, is an exhibition of weakness. The genesis of the weakness needs to be identified if we want to include the prospective customer / engage with him in a fruitful relationship. Any untreated / misunderstood sense of comfort / understanding of the customer will be a negative.  

 

HEROISM / SINGLE MAN SYNDROME

“I was always the guy who jumped off the roof of the garage, who could climb up the facade of a building.”

This is exhibited mainly in contract based businesses. This is considered in many businesses to be a good / positive sign. Yet, a person who talks in a self-centered manner and boasts of his own contribution excessively, is a sign that needs to be enquired for :

(a)   Future / Continuity Planning

(b)  Involvement of juniors / family in the business

(c)   Assessment of USP which makes them strong in the business.

(d)  Back up Arrangements in the absence of the key man.

Any objective of any conversation / discussion is to be able to assess the relationship and customer properly, and make the relationship a win-win. Any customer who earns well, does well based on a relationship will not kill the relationship. Keeping the relationship healthy and open is Critical.

All these triggers discussed in this chakra, are to direct the course of discussions, to enable the customer to disclose all information without apprehension, and for any financier to structure a customized product for such customers.

No customer is bad. It is relationships that get severed due to some kind of information bottleneck. Customization of products in the Rural segment is key for success / penetration.    

 

FEARFUL / MEEK

"Meekness is tough to understand; It is tougher to accept and embrace"

Meekness of a person should not be construed as a weakness. How, we all wonder, can those who do not stand up for themselves, the weak and feeble, inherit anything but their own destruction ?

Meekness means acknowledging the possibility of loss and acquiescing to it, knowing intuitively somehow that aggressive resistance would ultimately prove damaging and futile.

Naturally being meek is not a negative. However, a put on façade of Meekness is dangerous and misleading. Hence the objective here must be to find out if the meekness is exhibited on his business front.

(a) Casual enquiries in the market

(b) Eco-system checks

(c) Liquidity Ratios Check

(d) Cash Flow Verifications with specific focus on Receivables.

 DISGUST / SARCASM

“ Sarcasm is actually hostility disguised as humour “

This emotion is by far the most feared amongst financiers. This is nothing but veiled hostility and unacceptable bullying.

Sarcasm also assumes, many a time, a position of being superior and us being inferior. We should only progress with the relationship in this case, if the scales are balanced and the person is able to grant a position of power to us as financiers. In case this is not possible, please walk away. Do not let yourself be trampled.

At some point, it will dawn on them, their follies and the position of balance will return. If it so returns, it should be accepted and we should be able to offer them a healthy relationship going forward. Such acts in the Rural Market make them loyalists.

 WONDER / PRAISE

“ The trouble with most of us is that we would rather be ruined by praise than saved by criticism”

I remember reading about a research that talked of a 7 year old who kicked and screamed and then squeezed her newly made clay figure into a ball when her mother praised it as “ beautiful” !

Praise is an important tool. Yet when a prospective buyer / customer / borrower uses this towards a negative end, it needs care and attention.

We should be able to differentiate between

(a)   Praise out of Politeness

(b)  Patronizing

(c)   Sarcasm and Positive Praise

(d)  Cartel formations through praise mechanism for gain of all in cartel  Vs. One person praising and highlighting.

For example, a dealer praising a financier in the normal course to a customer, is considered marketing. However, a customer praising the financier excessively is considered cartelling.

Ability to distinguish one from the other requires practice, skill and awareness.   

 SPIRITUALITY EXHIBITION

Any exhibition of excessive Spirituality, Religious following -needs closer review. I remember a customer who used to come to our branch office and offer Tirupathi Prasadam (A devotional offering made to a god, typically consisting of specially prepared laddu that is later shared among devotees.). He would invariably not be available during installment due dates.

We enquired with executives who had sourced his case, and found that he had exhibited high religious sentiments, and looked for auspicious time for signing of agreements, accepting or giving money in his business, and felt an inner calling to serve the divine and hence was extremely religious and pious.

A detailed market check revealed that he had borrowed from multiple financiers and all of them were in the same boat in managing this relationship. Further, we also found that the largest consignment of alcohol was delivered to his residence every evening where he hosted a party to elite group of businessmen and traders. So much for his being pious.

Being pious is not negative. Yet many a time, it is a case of exhibitionism, momentarily put on to create an impression in the minds of the onlooker. Such exhibitionism requires unbiased views. A true pious man would be a gentleman in maintaining relationships and would never resort to “timed” Exhibitionism of religiousness.

 

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All these bhavas / expressions are very important and truly a CHAKRA that can help us prevent our companies from being taken for a ride. Such is the power of this chakra, that it gives the perceiver the much required insight to be able to walk into any relationship with confidence.