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Case Study 1: Financial Services Sector: Housing Finance: To develop a strategic plan for a housing company
In the summer of 2010, a young housing finance company approved by the National Housing Bank (NHB) met to discuss the need to develop the road-map for the organization with three year time horizon. The consulting team being specialist in mortgage space started the exercise by understanding the organization and its leadership team. However, the leadership team had a major concern on the short-term. On the back of their mind, a constant bell was ringing to see the possible ways to leverage the balance sheet to raise resources so that they have enough fuel to run the place before initiating any major strategic initiatives.
While, we understood that the organization has changed hands and the concern to raise resources at competitive terms from the market was more to do with building blocks of the organization rather than only the size of the balance sheet. Theoretically, any housing finance company could borrow fifteen times of its net owned funds. However, the lenders view and the reality of the market place were different.
We took holistic view of the business encompassing the aspirations of the board members and worked out a three year business plan with clearly laid out road-map for putting in place the building blocks of the organization in terms of structure, people, products, markets. While we drew the road map for short term strategy to raise resources, the strategic plan set the agenda for the leadership to increase the paid-up share capital of the company considering the regulatory framework for the lenders to look at the organization favorably to raise resources.