If you have been in Equitas for a few minutes, you would already have understood what Equitas means… you would already be banging your right fist on to your left palm like some of the yesteryear villains and showing your open arms in front of you as though you are a Holy Baba blessing your disciples ;-)
Yes, Equitas is Latin for “Equity” or “Equitable” which may be loosely translated into “being fair and transparent”. We use the above two symbolic actions to denote “fairness” and “transparency”.
Before joining Equitas, what is the symbol which would have come to your mind when you think of “fairness”…? Yes, that’s right… scales of justice held by Lady Justice (Dharma Devata).
Assuming, you go to a grocery shop and wish to purchase 1 kg of rice. When can we say that the transaction is fair? While measuring the quantity of the rice, both scales should be at the same level. Scales at the same level denote fairness and the needle balancing the scales denote transparency.
In essence, what we are saying is that if both parties (in the above case, the buyer and the seller) in a transaction are benefitted, then it is a fair transaction. This is same as Win: Win approach, wherein we strive to ensure that both parties to any transaction win.
If that were so, why did we chose fairness over win: win approach?
When we started as Micro Finance, we were dealing with the vulnerable part of the society. The women that we were serving did not have too many options to borrow money from and they were starved of funds. They were willing to borrow at unreasonable terms as the need for the funds outweighed the need to have the best terms. Most of the Local Moneylenders and other Micro Finance Institutions were exploiting their situation and were lending at exorbitant rates – the real interest rate ranged anywhere from 35% to 50% with Micro Finance Institutions and 150% upwards with Local Moneylenders. We felt that these rates were unfair to the customer and we decided to offer our loans at 25.5%, which was a fair rate for our target customers. To make this rate viable for us, we worked hard on improving our operational efficiency to make reasonable profits from the transaction.
When we started moving up the value chain wherein the customers had more competitive options, we started adopting the win: win approach. For example, in Vehicle Finance, we initially started only with used commercial vehicle finance, as the interest rates prevailing for new commercial vehicle finance were unviable for us. Our rates for used commercial vehicle finance were pegged at similar levels of our competition as the customer had multiple choices.
To summarize, fairness is important when one of the parties in the transaction does not have enough choice. Win: win approach is important when both parties have enough choices.
How to practice win: win approach?
1. In any situation or engagement, identify who are the stakeholders, i.e., people who are likely to be affected by the decision.
2. Identify what would constitute a win for all the stakeholders, by listening to each other.
3. Keep the conversation going until you find a solution, which is beneficial to all the parties concerned.
4. If required, enter into a win: win agreement so that all parties are clear on what to expect in this engagement.
And that’s the Win: Win Approach.