Home Banking Interview with Mr. Dowlat Parbhu, Chief Executive Officer, Demerara Bank

Interview with Mr. Dowlat Parbhu, Chief Executive Officer, Demerara Bank

by internationalbanker

International Banker is joined by Mr. Dowlat Parbhu, Chief Executive Officer, Demerara Bank, to discuss the bank’s achievements and future goals, its investment in customer relationship management and commitment to social responsibility.


Today, International Banker is joined by Mr. Dowlat Parbhu, chief executive officer of Demerara Bank, to discuss the bank’s achievements and future goals, its investment in customer relationship management and commitment to social responsibility. Dowlat, really good to meet you. Now, you’ve attributed the bank’s astonishing feat of maintaining zero nonperforming loans, NPLs, for two consecutive years, 2022 and 2023, largely due to the effectiveness and quality of the bank’s internal lending process. What are some of these processes, and how has the bank optimised them to such an impressive standard?

Good morning, Simon. Thank you for having me firstly. The bank’s journey has been one of knowing the market, knowing the people. And lending itself comes with some basic tenets. One of which is transparency and skills. We have developed a very good pool of people that are able to quickly assess. Also, Guyana is a very small market. We know everybody. We know who to lend to. And that has allowed us to be able to maintain such an astonishing feat. Our lending goes through a process, and we believe that a process dictates the outcome, whether to lend or not. And if there is any circumvention of that process, that is when you will have events of mistakes. That is when a loan could be badly valuated. And we felt that to maintain transparency, to maintain a sustainable economy, that we lend in that method that has helped businesses to grow. Because it’s not just lending; it is lending in a sustainable way. It is lending and advising the client that, “Listen, this might be a better structure or a better approach. Could you refine your proposal?” And we have seen that has helped us tremendously. It is a feat that I haven’t checked globally. I haven’t seen any bank being able to achieve zero nonperforming loans. This is also very prescient because the public could say, listen, we can maintain zero nonperforming loans. We don’t just lend. We just keep a very risk-free portfolio. Our lending has been in all sectors of Guyana. Our growth in lending for the last three years was 103 percent, which far outpaces the local banking sector. So, it’s not a fact that we’re not lending. We are lending aggressively, prudently and maintaining these policies in lending.

Thinking about these processes, through your digital-transformation partnership with Salesforce, you’re looking to kind of leverage their tools and capabilities to streamline processes, enhance customer satisfaction and adapt to the evolving financial landscape. What are some of those tools and capabilities that you expect to be the most significant and useful for you in the bank?

So, historically, banking has remained fairly manual in Guyana. Service, obviously, when the volume of people comes into the banking service. That time in getting a transaction completed, whether it’s opening an account or processing a loan, becomes a time-consuming process because of the volume, because of the paperwork, because of the manual process. And we feel that digitisation has to happen. Now, some of the most important things that customers can do from an everyday banking transaction, they can open an account remotely. Sitting at their home at their own convenience to be able to open an account. And that can be done internally. So, the process, even if a customer comes in the bank, it takes about 20 minutes, 25 minutes, because there is so much systems, there is so much paperwork. As an institution, you have certain regulations you need to conform to, whether it’s local or international. And we will be able to develop an automated process that, within one minute, that an account can be generated, a process that was prior 20 minutes. Similarly, with any loans, we will be able to automate that process and not just approve a loan but give the contractual documentations the very minute to the customer. Apart from that, we will be able to move money instantly and seamlessly, whether locally, internationally and also create mechanisms for retail remittances to Guyana.

Now, the bank recently made a sizable investment in a customer relationship management system, CRM. What are some of the most significant features of this system? And what does it allow the bank to achieve that was impossible before?

So, CRM means customer relationship management. And as a service industry, we have to serve our customers and try to find ways to efficiently serve our customers. This includes evolving with technology. Digital transformation has been quite slow in the market. The bank has seen a growing economy. Guyana has found oil. The mode of development is far surpassing what you see in the normal development country. Guyana’s GDP is surpassing 30 percent. The bank’s growth is surpassing 30 percent yearly. And to efficiently serve our customers, we saw that digital technology has to be part of our strategy. We have contracted Salesforce, which is the number one CRM company in the world. This has allowed us to integrate all our backend systems. This has allowed us to have one simplified interface for our customers. This will improve our efficiency, such as opening of accounts, whether to, when to approve a loan. Customers being able to be quickly notified if there’s updated documentations required. Basically, we can take a 20-minute, 30-minute process to within five minutes now. In addition to that, it offers a whole host of integrated payment features, whether it’s moving money locally, internationally or creating mechanisms for retail remittances to Guyana.

You’ve mentioned the kind of relationship that you’ve developed because you know everybody. Well, not personally, probably, but there’s that kind of trust thing in terms of that. What’s the bank’s single most significant strategy to maximise its customer-centric business model and maintain those long-term relationships with customers? And why do you believe that this strategy so effectively generates customer satisfaction?

So, in your question, you answered my question. The word is trust. If we’re able to create a market where the customer sees the bank not as an institution but as a family that we are able to go to, explain our problems and be able to get a solution. The bank has been able to create that trust, that reputation in the market that we’re able to offer that assistance, whether it is for the larger corporate or whether it is socially; we have devised and created many programmes to help the vulnerable in society. Being a private indigenous bank and the only indigenous bank in Guyana, the bank was founded on the model where we’re here to help the private sector. And we’re here to help develop the economy. We’re able to get people out of poverty. And that has remained our goal, and that will remain our goal in the future. That we’re seen by the public as an institution there to help. And we’re there, and we understand the market. Being a local bank gives you not a disadvantage but gives you a tremendous advantage of knowing the people and being able to craft products and services that fit their pockets, that fit their needs.

And how does the bank seek to expand its financial-services footprint to the unbanked and underbanked segments of Guyana’s population?

So, over the last few years, we have been evaluating the market. So, Guyana’s population is mostly centred around the coastline. And the bank, over the last year, has been looking at where are the most populated areas. We have recently opened two branches, over the last two years, and those serve maybe 30 percent of Guyana’s population, where it remained prior to us being there in an underbanked area. And most of Guyana’s economy, a larger part, especially in the country, depends on agriculture. So, being able to have locations there, being able to craft products and services to serve those industries, is quite important for us. In addition to that, we see our vision in digitisation, in going and partnering, collaborating with other local partners, such as maybe the internet service providers, where we can provide digital-banking options to the smaller areas. We feel that every Guyanese deserves the right to have banking facilities wherever you may be in Guyana. It is our vision that we want to bring those services, whether in a traditional brick-and-mortar location or through digital banking.

The bank’s position as the largest lender to Guyana’s agricultural sector can be partly explained by your strategic investments in supporting the sector’s development. And you recognise in that, I suppose, the critical role in the economy and the food security that it plays. What have been some of the most impactful of these investments? And what has this financial support achieved for the sector that was previously impossible?

So, Guyana is a major agriculture-based economy. Prior to oil, agriculture, mining, forestry played a substantial role in our GDP. Demerara Bank being an indigenous bank, integrated with society, we have made it part of our policy that we will support and continue to support the agricultural sector. We are the largest lender in agriculture. Our lending is more than 60 percent of the industry’s lending, particularly in the areas of rice. We have crafted policies along with support from the government in lending in both rice, in the fishing industry and also in the forestry industry. We have also recently launched a poultry lending scheme, which gives concessional lending to poultry farmers within Guyana. We have also launched a programme that saw 300 farmers benefiting from concessional loans over two years ago. This has allowed them to improve their yield, improve and manage their inputs, being able to negotiate better prices. And they have also had sufficient working capital upfront to be able to go back into the crop when it is required.

Do you believe that the bank’s support of Guyana’s agricultural sector has materially boosted the country’s rural development? And if so, what is the most visible improvement that you’ve observed?

That is quite an important question, and we have seen that in the data. When we see farmers over the years that they were struggling to make ends meet, and it’s quite a difficult situation, we saw that it was quite a needed opportunity for us to improve the pricing and the costs and the availability of financing. This we have seen directly with farmers now being able to invest without lending into the sector. They’re adding new machinery every year. They are able to expand their social living, whether it is to expand their house, whether it’s to buy a car or buying new houses. So, we’ve seen a direct marginal benefit in their social life.

Now, we’ve focused on customers and the trust that you’ve built with them, but let’s turn to your own people. You’ve invested significantly in comprehensive training programmes for your employees. What are some of the key goals of these training programmes?

The key goal is to build a very standard talent pool, but also to give opportunities to our people to specialise in key areas. Some of the areas which are quite important is our investment and our credit talent. Digitisation brings a whole host of opportunities, but we need people. Our human resources are one of our most prized assets. And we have programmes that help improve their lives, to help improve their social status and to help improve their knowledge base within the bank. We see that, given opportunities, especially to the younger people within the sector, and I must say that the bank itself, our executive team, are a group of young people. It is an opportunity that we have been given at a very early age. And we would like to give the next generation that opportunity. So, we’re creating a team of investment bankers. We’re creating a team of corporate, retail, credit specialising whether in sectorial lending and improving that analysis so we can maintain that zero nonperforming loans.

And, let’s just come back to the kind of technology side of it, too, because you’ve talked about how important digital innovation is. Has the staff, have you got the staff with the ability to really adapt to that? Because it’s so quick, it’s so fast. There are so many things going on. Have you got the folks around to help you with that?

So, an important aspect. Before we started this journey, we thought it best to get everybody on board. That let them see that if you’re doing maybe 30 minutes’ worth of work, you can achieve that in ten minutes or five minutes. And our team bought into that. Our team saw the benefit. They were part of crafting the features. They were part of crafting the business flow into what the end product would look like. And I must say that our team is excited to have this digitisation as part of our strategy, as part of our future growth. And they’ve embraced it. Usually, you have quite a resistance in any institution where you introduce new technology. It could be difficult. It is not what they’re used to. But we have shown one main benefit is that your work would be reduced. The time taken, the redundancy in the process, has been reduced. And we’ve had acceptance, and we’ve built it in such a way that it is so user-friendly that while we were testing it, somebody who had never seen the system was able to navigate it without any issues.

Right. So, they didn’t need somebody to show them how to use it. It was intuitive. Yes, O.K. So, the bank is highly regarded in the local market for its unwavering commitment to social responsibility. Do you believe that being an indigenous financial institution gives you an advantage in this area, especially regarding a deeper community engagement and greater potential to onboard new customers?

Absolutely. By being an indigenous bank, we know the market. We know where the unbanked area is. We know what are the needs of the customers. And knowing that, we’ll be able to craft different policies. We take a vision, which can be global, but we customise it to a local concept. Our social programmes are quite important because we see that it is an important aspect that we need to give back to the community. And that has been a focus where we have been giving back over the years. But we’ve changed our focus to give back on a sustainable basis. And let me explain what I mean by that. The bank is launching and will be launching during this year a series of sustainable programmes. We help persons directly. So, one of which is we’re starting an organic farming project, where the bank will be building an organic greenhouse, a series of organic greenhouses, at its location. With this, we will have a team that will practice organic farming. Whatever the produce out of this farm, we will give and donate weekly to vulnerable sectors of society. Additionally, we will invite participants to come and teach them this new technology in farming. And then the bank will grant them a concession loan to go and replicate this at their own home, at their own farm. So that they now can be part of this process of sustainable growing, sustainable living, and be able to contribute to the agenda of the country, which is to reduce our food imports by 25 percent. Additionally to that, there is a series of new initiatives, which I won’t reveal yet, but these are in the same mood, where we create sustainable partnerships to help bring persons out of poverty. We don’t just see giving a basket of something sustainable, but we would like to give you the opportunity so you can replicate it yourself.

On the sustainability fund, I understand that you recently transformed your corporate office into Guyana’s first fully solar-powered commercial institution and converted five locations to full solar energy. What have been some of the key benefits resulting from this transformation?

Number one, the cost saving. Guyana is right now, the cost of electricity is one of the highest in the world. It’s around 33 US cents per kilowatt hour. When we look at the cost-benefit and, of course, our drive to reduce our carbon footprint, it was an idea that we toyed with that: Could we fully power this building with solar and no connectivity to the public utility? Many persons said that it was not possible, but we, with partnership and local talent, were able to design a system, a pilot system, where we installed a 125-kilowatt solar power. It took over the entire roof of the building, because the building wasn’t designed initially with the idea that we would eventually like to put solar. That project was a success. The bank was able to recoup its investment within three and a half years. And by any investment standard, that is excellent. We took that and refined those designs, and we have installed it at five of our locations. Basically, we’re not paying anything for utilities. We have a backup generator just in case of any technical difficulties. But over the last seven years, I think, we have been a leader in pioneering solar. Actually, after we had launched solar, we have seen a lot of businesses starting to adopt solar. We have seen a lot of businesses that have gone into niche products, such as supporting and distributing solar products. We are seeing a lot of homes, individual families, are taking up solar. So, we being not just a leader in proving the concept that commercially this is viable but also being able to encourage others to adopt this method.

And from a business point of view, has this seen new customers being attracted to the bank because of your forward-thinking on solar energy?

Definitely. People are, of course, fascinated. They said, “How could you power your building without any connectivity to GPL? It’s a commercial building. You have hundreds of ACs. You have lights. You have equipment. How are you able to do it?” And people were fascinated. One, that you were able to achieve it. And local talent was able to achieve this without much intervention from international experts. And also we crafted some lending schemes to benefit those who want to go to solar, and quite a few customers have adopted solar. They’re seeing the benefit, because when your bill is cut by half or 75 percent, you’re quite happy. And they get a concessional loan to go with that. So, we have seen and expanded that programme to retail now, where if you have an individual house, or even commercial. You have an existing building. We will still give you a concessional loan to retrofit even the equipment, whether to go to inverter ACs or LED lights to reduce your consumption on the national grid.

Finally, what is the bank’s most significant goal to achieve by the end of this year?

One of which is digital technology. We would like to see the full suite of rollouts of our Phase One vision of our digital plan. This will include all the backend integration with our existing systems. This will bring out new interfaces for customers, whether it is traditional internet banking or mobile banking, with integrated payments and full digitisation of our internal operations. Thereafter, we do have a vision of what we want to see in Phase Two. And we’re in discussion right now with our implementation partners to craft our refined features of what we would like to see in the localised market.

And you’ve been with the bank for quite a while. This is your first full year as CEO. What’s your own most significant goal as chief executive during the next year?

While the bank’s vision is digitisation, my goal is to get the public to adapt to digital. It is quite a difficult thing because you have generations and generations who are accustomed to the traditional banking. You still have customers coming into the bank and saying, “I would like a book rather than an ATM card.” That goal would be to create programmes to get the public to adopt and accept digital banking. And I would like to do that holistically. The bank’s plan is to build some digital centres, free of cost to the public, of course, where you come, and we teach you and show you the benefits, that you do not need to come into the bank anymore. All of your businesses can be conducted using these methods that we’re introducing to the public.

Well, best of luck with that. And thank you for your time today.

Pleasure. Thank you.


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