The credit and lending industry, otherwise called the loan industry, has seen substantial growth in the past decade. Increased consumer spending and confidence, and innovations post the 2008 financial crisis have improved the effectiveness of our banking system in handling consumer credit, responsible lending and efficient recovery. Opportunities in the loan industry have been growing, especially since 2012-13. Post-GST, there will be changes in the way industries conduct business. This positively or negatively affects career scope in all industries. A change this huge in the way our tax system works can help create jobs in the consulting field. Businesses are seeing the need to hire GST experts as consultants so that they can restructure their operations in light of the changes GST has brought.
The loan industry, and the financial sector in general, are set to benefit from the reforms that GST introduces. Streamlining the tax structure benefits loan companies because it introduces a level of certainty in their projections of profitability. This makes them better able to manage risks. If businesses benefit, then the industry benefits, and this leads to job growth. Careers in the loan industry include administrative jobs, underwriting jobs, customer relationship managers, accountants, finance professionals, analysts and collectors. Some hire debt managers to assist them consolidate debt—a good debt manager can help people save money in extra charges and interest. Now, what are the reasons behind a healthy loan industry?
*Consumer credit grew steadily in 2016, both in terms of gross lending and outstanding balance. Growth was driven by increased awareness amongst consumers regarding loan schemes, and greater acceptability among them regarding opting for loans;
*Durables and card lending registered the strongest growth in 2016. It was driven by the millennial population, a majority of whom have higher disposable incomes than previous generations;Mortgages amongst different types of loans continued to be the biggest contributor to consumer credit in 2016,
*Mortgages amongst different types of loans continued to be the biggest contributor to consumer credit in 2016, and is expected to grow because of low interest rates and pent-up demand;
*A renewed trust in economic stability, higher disposable incomes, and smoother application processes for credit cards and loans has fuelled growth in this sector.
With opportunities in place, how does one prepare for a career in the loan industry? The first step is to score well in your HSC, graduation and PG exams. A minimum of 60% marks in HSC is necessary. Choosing the commerce stream after 10th can help you with thorough understanding of the basic concepts of finance.
After HSC, one can choose BMS (Bachelor of Management Studies), BAF (Bachelor of Commerce in Accounting and Finance) or BCom (Bachelor of Commerce). An MBA in finance from a reputed institution can give a boost to your career—it can make it easier for you to get hired by some big companies, giving you a head start.
Where do you fit?
You have to determine which role suits you best. If you are good at number-crunching and data analysis, then accounting and financial analyst jobs might be the way to go. If you think you’re better at explaining complex financial concepts to common people, you can be a good customer relationships manager. Are you good with communication and persuasion skills? You can become a business acquisition professional for a credit card firm or a consumer finance company. Do you find yourself to be a good decision-maker? Go for jobs in debt restructuring.
The biggest employers in the loan industry are banks and NBFCs. Then come consumer finance companies, debt consultants, housing finance corporations and corporate debt restructuring firms. Each sector is different in nature and some require particular skill-sets. Educating yourself constantly can boost your career growth. Books and online courses can help.
Finance is both a competitive and dynamic field, and getting mid- to top-tier jobs is particularly tough. Getting an entry-level job is relatively easy, but growing and becoming an indispensable asset for your company requires dedication and self-education. Lastly, a proper understanding of how to manage risks, whom to lend, how much, and how to secure profits and collections will help you secure a career in the loan industry.
The author is founder & chief consultant officer, eSilverbucks Consultants.