IndiaLends Advisory

By IndiaLends Advisory

May 28, 2018

An Interview with Anant Medhekar, Associate Professor Universal Business School

Prof. Anant Medhekar has an extensive 20+ years’ experience in leading the Finance function at leading MNCs like Bayer and Unilever etc.. He brings with him the know-how to implement Budgets, MIS systems, Cost Management systems, Cost Escalation management systems. Currently, he is Associate professor in Universal Business School.

We recently caught up Prof. Anant Medhekar, a financial expert with him to get advice on everything from wrangling out of control finances to getting over your fear of numbers and investing.

Here’s what he had to say:

Why is financial literacy so important to India?

If we have to understand why financial literacy is important then we need to first understand what this financial literacy means and then how it is linked to the development of the economy through individual actions whether it’s a developed country or developing one.

In simple terms I would say, financial literacy is the ability and confidence of an individual to use his financial knowledge while taking financial decisions to provide particular life style and comfort to their well-being. India being the developing economy having huge emerging market, characterized by large number of young population on earth today, the importance of financial literacy cannot be overlooked.

The need for financial literacy is more than ever before to ensure that present generation is ahead to lead the game. Financial illiteracy was the main reason for mortgage crises in 2008 and India with many developmental initiatives cannot afford to take chance of young population being ignorant.

Today, financial literacy has become one of the critical success factors for ensuring financial stability and to accelerate the growth and developmental programs, it is one of the key aspects of efficient economy. Being growing economy and many initiatives on card like Ease of doing Business, FDI, Make in India movement and other initiatives in Agriculture sectors, we need to be more vigilant in reaching out to the large masses for financial inclusion and education.

What are some of the challenges in teaching financial literacy?

Lesser efforts to develop skills and impart knowledge on financial literacy in schools and collages is the main reason of illiteracy. Lack of systematic approach to assess the risk attached to individual financial decisions. Culture, over confidence “I know it better” attitude also responsible for illiteracy.

How do you think young people are doing, overall in financial planning? If you had to give them an average grade, “A” to “F,” How are they doing? Are we getting better at this? Are they getting worse? What’s the trend these days?

Yes of course younger generation is doing excellent in financial planning. Active in the capital markets and interested in quick-wins and ready to take “Calculated risk”

Do you think the Internet has a big impact on Financial planning? How can the Internet really help someone get educated?

Internet is playing a very big role in impacting individual financial planning and decision making process. There are many website which provide on-line advertisement, free courses on capital market, finance for non-finance managers, venturing into start-up etc.

Many good institutes like IIMs conduct distance learning classes with the help of technology, partnering with companies like Hughes Technology or NIIT etc. and courses are the best-fit for the young generation to acquire finance and business knowledge besides developing their leadership skills.

Govt. skill development program also aim at imparting necessary skills for entrepreneurs including imparting financial knowledge.

How about someone just out of college? They’re probably not making much money yet, maybe struggling to make ends meet, maybe some loans as well. What’s your advice for them?

India is a land of opportunity and we need more job-providers rather than job-seekers. One should know various Govt. support and schemes which can help them making career move. Example: Start ups sell ideas to the capitalist who invest in the business, Acquire those skills or specialized knowledge which can be used to start your own business or getting into white collar jobs. For Higher education, many banks provide loans for which EMI starts when you complete the education. Students should know these things.

With market growth, competition has increase to meet the demand spurring a plethora of online lenders with the big banks catching up in recent years. Given the ease and speed with which a consumer can get an unsecured loan against a secured loan (providing an asset or collateral for the loan). What are your views on this online marketplace for instant customized rate quotes on loans and credit cards?

I am of the opinion that technology should be used to our advantage for betterment of the society, better governance, better controls and regulations. “Spurring a plethora of online lenders” is too risky and we do not want to see the crises like 2008 which USA and whole world experienced due to “Subprime mortgagee which induced financial crises. Such instances will defeat the very purpose of emerging economies like India and undermine the importance of financial literacy.

 

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