This guy runs an $8.5 billion company.
But he DOESNโT have a mobile phone, drives a beat-up Hyundai, and was forced to build a house by his wife.
His companyโs share price also beat the index by 58,500%.
These are a few cool things I learnt about R Thyagarajan - founder of Shriram Finance. ๐
๐ก๏ธ 1/ ๐๐ฒ๐ป๐ฑ๐ถ๐ป๐ด ๐๐ผ ๐๐ต๐ฒ ๐ฝ๐ผ๐ผ๐ฟ > ๐น๐ฒ๐ป๐ฑ๐ถ๐ป๐ด ๐๐ผ ๐๐ต๐ฒ ๐ฟ๐ถ๐ฐ๐ต.
Shriram ONLY lends to the poor.
98% of their loans are repaid on time.
Another 1% are paid late.
And only 1% of loans end up defaulted.
Big traditional banks are jealous of repayment rates that high.
Media brainwashes us all to believe that the poor are not credit-worthy.
The facts?
Shriram actually made $200mn in pure profit this year.
Those at the bottom of the pyramid will always find a way to pay you back.
But a rich man?
Heโll just file bankruptcy and move on. (ahem ahem)
๐ 2/ ๐จ๐ฝ๐น๐ถ๐ณ๐๐ถ๐ป๐ด ๐๐ต๐ผ๐๐ฒ ๐ถ๐ป ๐ฝ๐ผ๐๐ฒ๐ฟ๐๐ ๐ถ๐ ๐๐ต๐ฒ ๐ข๐ก๐๐ฌ ๐๐ฎ๐ ๐๐ผ ๐๐๐๐๐ฎ๐ถ๐ป๐ฎ๐ฏ๐น๐ฒ ๐ด๐ฟ๐ผ๐.
Indiaโs economic engine is the most impressive thing our world has seen.
But it is uneven as hell.
The top 1% own 40% of the wealth.
Most new wealth creation flows directly to the top.
The ONLY (and I mean ONLY) way to build a sustainable society which doesnโt turn into a scary utopia of upper and lower classes is to push the lowest rungs of the ladder up further.
Bottom-up.
๐ 3/ ๐๐ผ๐ป๐๐๐บ๐ฒ๐ฟ ๐ฝ๐ฟ๐ผ๐๐ฒ๐ฐ๐๐ถ๐ผ๐ป ๐ถ๐ ๐๐ฒ๐ฎ๐ธ ๐ฎ๐ ๐๐ต๐ฒ ๐ฏ๐ผ๐๐๐ผ๐บ.
Poor people are given exorbitant rates on their loans.
- Truck drivers have to cough up 80% interest
- Grocers and kirana owners have pay 50% interest
- Education loans go for 35-40% interest
Most poor people just accept this, because there was no other alternative.
Shriram saw the opportunity here and gave them below-market rates.
The result?
Tons of trust built and billions in profit.
๐ฅ ๐๐ผ๐ป๐๐/ ๐๐ถ๐๐ถ๐ป๐ด ๐ญ๐ซ = ๐ด๐ฒ๐๐๐ถ๐ป๐ด ๐ญ๐ฌ๐ซ.
Thyagarajan gave away $750 million of shares to his employees.
Just like that.
But he also pays mid-level employees 30% BELOW market, and senior executives almost 50% BELOW.
Despite him underpaying employees, most of them reject higher-paying job offers from other banks.
The work is simply that good.
He could have a mansion, but he lives in a 1500 sqft house that his wife forced him to build.
He could drive a different color Rolls Royce for each week of the day, but he goes to work in a Hyundai i10.
He could deck an iPhone 14 in diamonds, but he has no phone and enjoys reading newspapers + birdwatching.
Insane...