Nepali Times Asian Paints
Mega goes for megawatts and more


Some banks outgrow their CEOs. But Anil Shah is the kind who outgrows banks. In the last ten years he has been in and out of big banks like Standard Chartered and Nabil, and he now heads the newly established Mega Bank.

"I need change, and I need challenges," says Shah in his well-appointed new office in the former British Council building on Kantipath. With its rural banking focus, Mega offers Anil Shah both of these.

Mega has 1,220 middle-class Nepalis from all over the country as promoters, and 14 partners. This is a bank with attitude: its ideology is to promote 'financial inclusion' among the three fourths of Nepalis who are not banking at present. The promoters are divided into six clusters named after Nepal's mountains and they elect directors to the board.

"People often ask me who owns Mega Bank, and my answer is: the people," says Shah. "With so many promoters and partners no one can say 'it's mine'."

Mega Bank is zeroing in on small and medium-scale enterprises (SMEs) as part of its mission to promote self-sufficiency and job creation, and bring value-chain dynamics into the economy. It all sounds too goody-goody to be true, but Shah is deadly serious and says a country like Nepal must have this banking model.

"All the stakeholders Ė the bankers, development bankers, Rastra Bank, the World Bank, IMFĖ have to get together and decide once and for all what the strategic goal of the financial sector in Nepal should be. Is it only to make money and share dividends among shareholders, or is there a higher calling?" It is clear he has made up his mind about what the real answer is.

"It can't only be about profit," he continues, warming to his theme. "Of course you have to make money, but there has to be a nation-level goal of wealth creation by enlarging the pie through long-term economic growth. Just making money isn't enough for us."

Shah admits he came up with Mega Bank's slogan, which is now plastered across the country: 'Halo dekhi hydro samma' (from the plough to power). But no, he laughs, Mega isn't short for 'megawatts'.

It's clear he's been pitching his ideas to a lot of people in recent times. "It's not enough in Nepal today to say we will do what everyone else is doing but better," he explains. "That's for when everything is fine and there is political stability and economic growth. But if things are difficult, you have to carve out your own niche. You have to do something different that makes a difference."

Shah says the overwhelming response within a month of the bank's opening from small enterprises and agro-industries in the districts for loans proves that it is on the right track. He has just spoken to the Dairy Development Corporation about possibilities for expansion. This would fit the Mega model perfectly, he declares. Rural lending could finance an end-to-end value-chain to provide milk to the urban middle-class market.

Mega is nothing if not practical. "As the 28th bank in Nepal, we have no choice but to look at this model because the city is over-banked and three fourths of the market in the country has not been tapped," Shah explains.

Shah is one of a new breed of Nepali bankers who see a role beyond banking, even beyond the economy. The financial sector has to play a part in investment, economic growth, and job creation, not just for the sake of it, but to tap the full potential of the Nepali nation.

"As long as Nepalis are hungry we will never have stability," says Shah. "We now have political inclusion, but without economic inclusion there will be no future for this country."

Kunda Dixit

Bogged down
"Save for the future"
Who implements?, SUBRATH SHRESTHA

1. jange
There is only one way to find out if he is as good as his word.

Try and get a loan from them to start an enterprise.

Then we will know if it is just hype.

2. analyst
"He has just spoken to the Dairy Development Corporation about possibilities for expansion."

This is strange. Discretion is what's expected of bankers (and lawyers). As a banker, you do not go around revealing your potential or real clients' names to newspapers. That is just bad practice. DDC would not want  its bank to chatter about it to the media. Assuming DDC wants to go ahead with the expansion plans, expect it to shop around for better deals. 

"Shah says the overwhelming response within a month of the bank's opening from small enterprises and agro-industries in the districts for loans proves that it is on the right track."
A CEO is expected to exaggerate on behalf his company. That's no surprise. But how overwhelming is overwhelming? Could Nepali Times not interview some of these SMEs and asked what drew them to Mega? Why do you have to take the  CEO's word when his interests are clearly about promoting the bank? What's next? Virgins and untenured professors are flocking to the bank to open savings accounts? Bad journalism, Nepali Times!
Shah is one of a new breed of Nepali bankers who see a role beyond banking, even beyond the economy.
This is bad news. Bankers are narrowly trained professionals. If they are any good, they know more and more about less and less. That's the nature of the expertise in banking or in any field. When bankers lose their jobs or retire, the world does not get misty-eyed over them nor does it miss them. Most bankers only bring ruin when they try to be larger than themselves. 

I'd be interested to follow Mega's public filings. Recommendation for the time being: Buy now to sell in three months. 

3. Satish Shrestha, Spokane
Our banks are still adherent to classical system of banking. It appears that majority of people fear dealing with banks. I think banks need to simplify their policies in plane language so that ordinary Nepali would understand what the banks are all about. Like Ajay Shrestha, the CEO of BOK mentioned in "Save for the Future", the real challenge for banks is to reorient themselves from lending to deposits. Banks need to come up with efficient projects that would make banking less of a hassle and encourage general Nepalese to feel more comfortable dealing with banks. While Anil Shah's words sound pretty impressive, I really hope his words hold more water than those of our incompetent politicians. 

4. tanke

what is different between 1,220 promoters and 14 partners? If the company is a partnership why are there so many promoters? somebody please explain.

5. santababu

The first thing that struck me going through the article is the way Mega and Anil have been promoted. Figuring out why such a well-perceived periodical published such an article was not easy- well, my best guess drew me to two plausible reasons- either Mega or Anil (interchangeable??) sponsored the write-up or Kunda is one of the (desperate) promoters of the Bank. Whatsoever, I think to be so gung-ho about the bank that's not even a couple of months old and so obviously promoting the bank by one respected journalist is trivial and has only helped dilute Mega Bank, Anil Shah and Kunda Dixit himself- should have been thoroughly disappointing to all regular readers of Nepali Times like myself. I think this is the last piece I am reading from the periodical. Apologies for not being able to endorse the write-up.

6. jange
#5.   I think the correct technical term is "newsatorial". This is where an advert pretends to be  a news item. As only the owners of the papers and the advertiser know of the deal the reader is left to make up his own mind as to the nature of what he has read. This applies to all that is published in all "news" papers.

All in all a good way to sharpen ones critical faculties.

7. Gole
Banks will make profits, as long as the difference   between the rate of interest in deposit and borrowing is high. It has to be not more than 2%  -2.5% and see who are the survive.
You cannot expect such control by Rastra Bank or Ministry of Finance in this times; they are in cahoot with private banks. Money is power. Politicians are hungry wolfs, they are satyr. Their pet is of Betal or Surasas. Corruption and its nexus with politics is rampant at the macro level too.
Any way Anil Shah has just a right feeling,let others emulate him !

(11 JAN 2013 - 17 JAN 2013)