Last Thursdays with Anil Shah, CEO of Mega Bank (former CEO of NABIL bank)

Anil Keshari Shah, currently the CEO of Mega Bank and a household name in Nepal, in his own words ‘loves change, thrives in change’. He shared his story of his life among 80 young entrepreneurs during the Last Thursday’s program on April 29th, 2010 organized by Entrepreneurs for Nepal, Samriddhi and Change Fusion.

In fact, change has been the mantra of his living. As a kid, he went to seven different schools in Nepal and India, then he left to Washington for his college; when he came back to Nepal to do something, he worked for a Walt-Disney production movie. But this was just the beginning of changing environments and places for a young Anil Shah, who attributes the experience and outlook gathered in all those years of change for making him the one of the best suited people to live in a country like Nepal right now which is going through not an evolutionary but a revolutionary change.

When he first set foot in the banking sector, Anil Shah joined Nepal Grindlays Bank which would later become Standard Chartered Bank in an assisting position with a starting salary of Rs.3,500 to later become the Head of consumer bank and Chief Operating Officer there. Yet again, change was his calling as from Standard Chartered bank, he moved on to Nabil Bank and became the CEO in one year. In his five years as a CEO in Nabil Bank, the institution saw unprecedented success and it became the number one bank in Nepal. Right now, he is the CEO of Mega Bank which according to Shah is a bank which has brought inclusiveness from the root itself in a practical and ideal sense, that being the bank’s 1219 promoters, spread over 63 districts and investment mostly from people of middle level family from10 lakhs to 1Crore rupees.

Being a successful entrepreneur or a business person in Nepal is not everyone’s cup of tea and according to Shah, when you are doing business in Nepal, the first thing to realize is that you are doing business in Nepal; complaining and blaming the conditions won’t do you any good. Stepping out of the comfort zone and trying to work in the system is the formula to success. ‘Until you work in the system you will not succeed and once you learn to work in the system the success is yours’ says Shah. Giving his own example he adds ‘I have not invented any wheels by myself, I have taken out different wheels from different places and put it in the proper places and I have succeeded. I see which things work where and put the right wheel in right place and make a move. If you want to be one step ahead of your competitors, you must be able to learn from others mistakes, others success.’

His philosophy on the leadership he has taken over the years in different places is that if the institution or the team he headed were a band or an orchestra, he considers himself a conductor. He explains he has succeeded because he has believed in his orchestra and everybody who played the instruments in an orchestra knew how to play their respective instruments better than him. His job was to bring all of them together and deliver the result by coordinating them. According to him, as a leader, there are only three things one should focus on,
First, understand the person you are working with, then understand the work, the task and the time you want to deliver, and lastly, determine what leadership style you want to implement to get your goals done.

Speaking to entrepreneurs who are starting off and are in Small and Medium Enterprises i.e. SME’s, Shah says, from banking side this is the best time, because we are completely over banked in a classical market, so top business have 28 banks running after them so you have to find a new market and that market is SME’s. In Nepal every house has at least one shutter and each shutter has a SME. If you are in SME than, its the time for you, because its time for banks to search for new markets.

Questions and Answers

What is the value that you liked of Mega Bank?

The value of bank is not just making money- I want to make it clear; you have to make money, but not just money. You can make money by two ways, either filling up a tank by a bucket or by drops. The banks now are working in a bucket model where there is no such thing as micro lending, lending for SME’s. Mega bank has end to end value chain management, for instance, people eat vegetables or chicken or anything in the five star hotels which might have come from India or other places, but we have vegetable in Thimi as well. So, we will make such a chain as to bring vegetable and chicken from Nepal itself to sell in big hotels and we also finance in the villages to increase the production. We have hotels as our consumers whom we could talk to and they could buy the products from these places. So, the wealth will be earned not only by the hotels but it will be distributed to all the producers and the entrepreneurs. This is one of the key towards long term economic growth. As this was the idea of Mega Bank I chose to be there.

How do you finance any SME’s? What are the requirements?

First you have to have a business plan that works and that makes you money. Because if you don’t make money , you won’t have any thing to pay to the bank. So, showing your houses, land is not the major requirement. If we put these things as a requirements, there wont be any SME’s coming to us. We are trying to initiate a change of a culture where your plan works, not the collateral. But it might definitely take some time.

We have so many geographical difficulties, and transportation problem, so how can you deliver things on time?

Let’s say apples come from Mustang. If anyone started jam factory in Mustang and asked BhatBhateni or BlueBird or any other store to sell the jam in their department stores, they won’t refuse. If we tell Buddha Air to give few subsidies in transporting the jam, they will surely help. Even the department stores love to sell Nepali jam. So, who will facilitate the talks between the farmer, factory owner, and the department store is Mega Bank. That is our work. We neither produce jam nor we sell, we just finance both of them. Anyway it’s not easy, its difficult, so there was no one doing it till now.

How is today different from 1991, after restoration of democracy?

It’s the same thing, if we dig the problem of any area either you are a doctor, engineer, banker or a laborer, it all comes down to politics. One sector that has failed us is the political leadership. Be it the king or prime ministers or a ministers or parliamentarians, good leadership is what’s lacking. Unless we have political leaders with a vision and ability to see things that are outside the box to do things that are within the box, its going to be all the same.

What are the roles of the citizen to develop the country?

Get involved. It doesn’t mean drop every thing and jump into politics but get involved and again it doesn’t mean just talking about it from your room over a drink. We have to get involved and talk, because if we continue to stay in the sideline, we don’t have the right to say others have not done good. We should be involved not against any one but for our voice to be heard.

What is unique in your bank?

I think our main feature is that it is a first five star bank, an inclusive five star bank. We compete on the level of service; we make our costumers feel the difference. For instance, we may take a cake to the daughter of account holder on her birthday, and if the father sees his daughter returning home laughing, then you will know about our service. We not only ask SME’s to save their money in our bank, we will ask them if they need any money. So, we are doing things little differently than others.

I have seen in Nepal, most of the people follow what others are doing. So, what do you have to say about the culture?

I generally love to come to Nepal because I can see everyone happy. Everyone is smiling all the time even when we have to walk six hours to get water or when we are dying from diarrhea because of lack of medicine. Because our satisfaction is too low, we have the highest mountain in the world but we summit too early. Unconsciously we have huge inferiority complex with our two big neighbors. We go for our study in India, go for tourism in India, we used to go to die in India between Baranasi, but as soon as we return from India we start calling them bad names. But I am very happy to see the young generation right now, I think the culture is changing.

How difficult is to collect the deposit for a new bank in this competitive banking?

I think it is extremely difficult because there are established bank, older banks, which already have deposits. Deposits are our raw materials. There are lots of people in Nepal whose money is not in the banks. We have to see how we can pull them in. We can see market by two ways, there is an example for it, two business men went to the island where no one was wearing shoes. One man said, here no one wears shoes, so there is no market. The other man goes, no one is wearing shoes so I can sell shoes to every one. You can look at both ways; most of the banks say we don’t have deposits, what can a new bank do and most of the bank target people who already have shoes, so we are targeting the people who don’t have shoes, who haven’t put their money in the banks yet.

What would you like to say to the youngsters of Nepal who despite the adverse political situation of Nepal and the huge trend of going abroad still think something could be done here in Nepal itself?

The best minds of Nepal can serve Nepal now by going out. Not only money is coming back, the skills are coming back too. I have seen that from the examples of British Gurkha. Nepal will pull those skilled Nepalese back if we can put the act together and make a sound political environment here in the country, and write in a good constitution.

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