By TEH SHI NING

PERSONIFYING its personal loan was GE Money's novel strategy to get Singaporeans to meet 'James'. The innovation and focus on service behind that move is what GE Money intends to use to its advantage in the face of any added competition, says its Singapore and Malaysia chief executive Rahul Gupta.

GE Money is known for having pioneered mass-scale lending to low-income borrowers here. Before personal loan product James, it had ezyCash - its first venture into consumer finance after building its car finance business.

'We identified an opportunity on the personal loans side, in the underserved segment - people who did not have access to a reputed organisation from which to borrow money,' Mr Gupta told BT in an interview.

Key to GE Money's roll-out of ezyCash in 2005 was finding a unique distribution partner in SingPost, then looking to diversify its own business model. 'The coming together of a strong global brand in GE Money, and a strong local entity in SingPost with post offices reaching into the heartlands - we thought this would be a good partnership,' Mr Gupta said.

Once ezyCash had carved out for GE Money a substantial slice of the market pie that was once shared among smaller money lending players though, the firm realised that it needed to 'go up the food chain'. This meant catering to a segment already being served by other financial institutions with 'James', aimed at those earning at least $2,500 a month.

'There was nothing really sacrosanct about the name James, we just had the idea of making the personal loan more personal, and built a personality around it,' says Mr Gupta, who led the team in launching the personal loan product in 2006.

'As a late entrant to the market, we knew we were only going to succeed if we could break through the clutter from a branding point of view. And, if our product offers something others don't,' he said.

As with ezyCash, James offered customers loans of up to four times their pay - twice what banks were allowed to offer. Loans on James could reach as high as $30,000, compared to the $12,000 maximum under ezyCash.

Naturally, this did not sit well with some banks - who felt that it was unfair that different regulations should apply to institutions lending to the same market.

However, the tables turned in March, when relaxed regulations allowed banks to sell unsecured loans to individuals with a lower annual income of $20,000 instead of $30,000 previously. Also, GE Money, which previously operated under an exemption, was brought under the new Moneylenders Act, restricting its loans to two times monthly income.

But, Mr Gupta thought that the size of the segment may not be very attractive to competitors. 'Every financial institution has its own strategy. Some are more focused on the affluent segment, some on the mass-market,' he said. 'We've picked our spot and we're sticking to it, continuing to be innovative and customer-centric.'

He added that GE Money's 'strong affinity with customers and insights into their needs' as well as its 'strong risk management capabilities' should help it keep current customers and win new ones.

As for the effect of the financial crisis, Mr Gupta said that volumes did slow, in part as fewer people sought loans but also because more caution was exercised on GE Money's part to guard against undue risks, and ensure that customers did not over-leverage themselves. The stress on the system did lead to a rise in delinquencies and losses, but these are now 'inching close' to what they were in the good times, he said.

Recently, GE Money introduced a new 'interest waiver' feature to its range of loan payment options for James. It rewards customers who make repayments promptly in the first year of the loan, by halving three months of interest charges - an example, Mr Gupta said, of how his firm intends to 'keep up with customers' evolving needs' going forward.

This article was first published in The Business Times.