With the positive signs of economy reviving, financial service providing companies are accelerating at a greater pace. Considering this development lot of financial service providers has taken up franchise route for growth. A review
The financial services space is rapidly growing in India. According to the latest Central Statistical Organisation (CSO) data, financial services, banking, insurance and real estate sectors have risen by 7.8 per cent in the third quarter of 2009-10. This displays the success of the financial service industry. With the over-all increase in the finance services seekers, finance service providers took to franchise route, thus creating a great scope for franchise opportunity.
Till a few years back, the franchising which was an unknown concept in this field has gained lot of momentum in the present times. Before discussing the factors responsible for this development, let us first get familiar with the term ‘Financial services franchisors’.
Financial service franchisors
Financial services refer to services provided by the financial service companies. The finance service companies encompass a broad range of organisations that deal with money management. A few of these organisations include banks, insurance companies, consumer finance companies, stock brokerages, investment funds etc. These companies offer various services such as asset protection, investment and savings, retirement plans, customer-orientated service, besides offering personal loans, commercial loans, mortgage loans, and education loans for the aspiring students. Financial service providers are on the rise as franchising as a mode of expansion is being opted by this industry. Manish Shah, Associate Director- Business Strategy, Equity & Product Development, Motilal Oswal Securities Ltd shared, “The belief in entrepreneurship and the drive it brings to the business, made Motilal Oswal take the franchise route. Franchising brings more scalability to the business and the business becomes entrepreneur driven.”
Factors attributing to the growth of financial services
As mentioned, the financial services companies provide and manage the investments of individuals aspiring for a better life. Moreover, the need for credit and investments has led to the growth of the financial service providers in India. Let us have a look at a few other factors responsible for their growing success:
High standard of living: With the increase in disposable income, Indians aspire to enjoy the luxuries of life. In order to possess a good house, car, and other comforts they are taking loans from various financial service providers. Moreover, such financial providers also help the customers manage their investments and savings.
Progressive attitude among middle class: The middle class has become more progressive in the 21st century. Some desire to rise high by attaining higher qualification from foreign nation and others aspire to have their own businesses. The financial services are the best source for fulfilling these aspirations.
Progressive regulatory reforms: These companies are continuously reforming their systems to provide maximum benefits to the customers. This includes incorporating and initiating new methods and plans for investment etc.
Departure of recession: The economic slowdown quickly abating has been an impetus for the rise of the financial services companies. Clients are ready to invest their savings in these companies to fetch high interests. Thus, financial service providers are back into action with more plans to grow bigger.
Awareness in the society: A decade back, people were not aware of the benefits of taking insurance, or managing their funds, and equities. However, with the rise of awareness, now people know the benefits of investing money wisely. Furthermore, in the present society availing loans from the financial companies is no longer a problem.
Key players in the industry
A survey carried out by ‘The Franchising World’ magazine identified the Top 100 franchises, including a few financial companies. Let us have a look at some of these major financial companies.
Motilal Oswal Securities Ltd (MOSL): This company is included as one of the most established and well known financial service providers. MOSL started operations in 1987 and initiated franchising in 1990. It is presently recogonised as a well diversified financial services firm offering products and services such as wealth management, broking and distribution etc. It has 1293 outlets pan-India and plans to have 5000 franchises by the end of this year.
Sharekhan Ltd: Sharekhan launched in 2000 and started franchising the same year. It is an online trading portal with a pan-India and international presence with more than 1380 outlets. Sharekhan offers services like portfolio management, equity management, commodities and distribution of mutual funds, insurance etc.
ICICI Securities: It is an equity house providing end-to-end solutions through the largest non-banking distribution channel to fulfill the needs of retail and corporate customers. ICICI Securities started franchising in 2002 and currently has 1274 outlets in which 250 are company owned while the rest are franchised.
Besides these, there are other financial service franchise companies like Sykes & Ray Equities (I) Ltd, SKI Capital Services Ltd, Ventura Securities Ltd, Wellindia Group, CFS Financial Services Pvt. Ltd, Indiainfoline and Anand Rathi which have emerged recently but have a promising future ahead.
With the changing trends, it is just the right time to invest in a financial company through franchising. Aspiring franchisees can reap high benefits by investing in this field right away.