Dunia plans to have 'strong presence' in local market

In the first year of its inception, Dunia Finance saw itself in the middle of an economic environment that shook the world. The company, however, focused on catering to financial needs of individuals in salaried segment and small and medium enterprises instead of high networth clients and within a year expanded its presence across the UAE.

Rajeev Kakar, Founder, Executive Director and CEO, says human resource is the wealth of the company and the firm aims to carve a niche in the industry. "We want to be able to do things which will help people in day-to-day lives. We want to empower people, enrich lives," he told Emirates Business in an interview. Below are the excerpts from the interview with Kakar


Dunia started operations a year ago. Do you think the decision proved a step in the right direction given that the period was marked with economic turbulences?

Dunia is a product of the crisis, it was born in the middle of the crisis. We started working on it 20 months earlier, we took a brave step of creating what we felt was a big need in the market. There are so many under-banked people in the market. However, by the time we launched in September 2008, 14 days after Lehman crashed, we found that customers were not really being served correctly.

In a way when we launched we were quite convinced that our proposition will carry weight.

We built ourselves on talent. It wasn't easy to build the new brand. Building a new brand is one of the most exciting things in life; especially in financial sector where trust and knowledge credibility are so important. The only differentiator you today have is the people not the technology, infrastructure etc. We have built that from day one and spent a lot of time on hiring the right talent. The first six months was a period of learning and in the next six months we acted on what we thought.

Were the initial plans and targets affected by the economic crisis?

They were. It was inevitable; the world went through a very tough time. Because of the assumptions we made initially, it did disturb plans. Past was not indicative of future. First six months were periods of retooling. We always stuck to basics and that helped us create a strong base.

We were able to perform better than our plan. You have to realise that the first year was a pilot year also. We will soon have four branches and 15 service centres. Across UAE, we will have 19 points of service soon, we have the approval from Central Bank.

Were you able to meet your financial targets?

Yes, we have been able to meet targets. Compared to our original financial plan, bottom line and top line have been exceeding through our smart management, cost cutting, redirecting the resources, making sure we do what gives us the right return, not by under investing.

Did the liquidity crunch affect you?

We are well capitalised, even though liquidity is tight. We are leveraging our capital. We managed our liquidity very well.

As numerous players are engaged in providing financial services how are you different?

We provide a full range of products, transactionary, savings and lending products. We are a retail player – we have credit cards, loans for durables, auto loans, credit cards and cash back cards. We see ourselves as holistic solutions provider to our clients. When it comes to our focus segment, we want to provide our services to those under small, salaried classes and SMEs. As of now very high-end corporate and commercial firms are not the target. We realised that they were being covered by quite a few players.

We want to be able to do things which will help people in day-to-day lives. We want to empower people, enrich lives. That is where we differentiate ourselves.

Besides, instead of the regular approach of starting to offer services and then build infrastructure, we focused on putting everything related to infrastructure in place first and invested on it.

During the last one year how was performance in loans on durables front?

Loan for durables picked up in the past one year. We have seen more basic products that are not really luxury oriented; they tend to be recession proof but whether it grew at exponential pace? No.

New people come to the country that's the time when they pick up. Level of activity in the area is lower but has not completely vanished. It's a high opportunity segment, we will focus on it much more.

You are extending finance to micro and small enterprises. What is the extent on defaults in this segment?

Lending is an art and a science. Many players have burned their hands. Defaults occur when you don't follow the right practices. Capacity, collateral, character and capital are what lending depends on. We have forged relationship with our clients on a daily basis and intend to take it further and capture a share of 10-15 per cent in this segment.

Do you see positivity returning?

I think the worst is over now. Job losses continue and have to be arrested. But then job losses always extend beyond recovery phase. I guess the tail would carry on for a bit longer.

However, positive sentiment can be seen in the investor behaviour, they are willing to take a little more risk compared to a couple of months ago. Now investors are once again focusing on returns along with stability.

Where do you see Dunia heading into next year?

The next year would be one of the most defining periods for Dunia.

We started with 100 people and now have 800. We were able to train, make customers react to us and alliances with partners. Next year would be very exciting and with everything in place, we expect to serve more customers and have a strong presence in the local market.

We are looking at innovation; we are high ended on technology. We want to be able to use this to leverage customer reach. Geographical expansion is also there, we are open to opportunities and look at all kinds of models of growth. We want to add to product segments, too. On individual side, we launched a bunch of new products; we hope to get into wealth management and insurance and savings related products at some stage.

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