- Consumer financing plays key role in life of the households
- Financial, economic and social status getting stable
Interview with Mr. Rehan Ahmed Yousfi — a seasoned banker
PAGE: Tell me something about yourself:
Rehan Ahmed Yousfi: Currently, I am working in the capacity of Regional General Manager Faysal Bank which is the second largest Islamic Bank in Pakistan. I have more than 18 years of diversified experience in the banking sector. If I glimpse into my past experience, I started my carrier as a mortgage financial consultant in 2005 at ABN AMRO Bank and still have an association with retail banking. I completed my master’s program in Islamic banking and finance from Karachi University and BSc honors in Economics, Maths and Statistics also from Karachi University.
PAGE: In the Pakistani banking sector, the evolution of the consumer financing portfolio is a more recent phenomenon, as banks have traditionally focused on lending to the corporate sector and public sector entities, what is your take on it?
Rehan Ahmed Yousfi: Yes indeed! banks used to focus on stereotype ways of lending in the past but nowadays banks have adopted innovative ways of lending to capture the market and increase their revenue. In my opinion, the most important element of consumer finance is to raise the standards of living by purchasing various consumption needs. It is quite easy for consumers to access those items which are out of reach for them or they cannot buy at once.
We basically target the real market such as salaried or self-employed individuals, who are having documented evidence of income along with the capability of repayment of funds. Banks place a strong mechanism to evaluate customers whether he is eligible for the same or not. Some of the examples like mortgage finance, personal loan, credit cards and auto finance and time by time every bank changes its ways to introduce new products which comprise the above-mentioned facilities.
PAGE: Your perspective on various categories of consumer finance:
Rehan Ahmed Yousfi: In my view, it plays a very important role in the day-to-day life of the households. Typically, they pursue loans for personal requirements such as renovation and/or purchase of a house, education of their children, the marriage of their daughters and meeting urgent medical expenses etc.
Driving a car, and keeping a credit card for fulfilling their urgent needs thus it is a very optimistic component in my standpoint.
PAGE: Which factors are responsible for the widespread popularity of consumer finance?
Rehan Ahmed Yousfi: Though we are facing tough times in monetary policies these days but a few years earlier monetary policy of the central bank comprised less rate which gives easy access to accommodate the demand of the customer. Another fact is that the banking sector started to tap into the untapped market to expand more avenues for income. Creating awareness in the market by propagating the promotion of various brands and reward loyalty programs on credit cards and introducing more features in the product on a complimentary basis, attract the consumer and caused popularity in end users.
PAGE: Do you presume access to and growth in consumer finance carries both social and economic significance for society.?
Rehan Ahmed Yousfi: In an economic sense yes! Consumer finance is the key driver and positive phenomenon that fuels economic growth. An increase in demand and supply leads the manufacturing sector to expand the volume which creates more job opportunities for the public. Consumer finance serves as the source of financial stability and uplifts the economic and social status of the household. Enhancing consumerism has been the most effective way to steer the economy towards growth. As far as social significance is concerned, well-being and happiness depend fundamentally on obtaining consumer goods and material possession. Consumer finance empowers people to access such substances and it generates a positive impression on society.