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Comprehensive SWOT Analysis of Equitas Holdings – A Small Financial & Banking Institute

by | Case Studies | 0 comments

In our previous blog, we did a comprehensive study on the SWOT Analysis of the largest broadband communication company in the United States, Spectrum. Here we will understand the SWOT Analysis of Equitas Holdings.

The objective is to help you throw light on Equitas Holding’s transition from Microfinance Business in 2007 to the launch of Equitas Small Finance Bank in 2016. Empowering through financial inclusion to serve 5% of Indian households by 2025 with fair and transparent values is the mission, vision and values of the company.

Another aspect that made Equitas Holdings the massive it is now, is its marketing efforts. As the world goes online, marketing is changing and if you are curious in learning about the latest – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.

In this case study, we will learn about the SWOT analysis of Equitas Holdings. But first, let us know about the company and the product better.

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About Equitas Holdings

SWOT Analysis of Equitas Holdings

Leading microfinance company – Equitas Holdings Limited is another successful investor in subsidiary companies and loan providers to them registered under the RBI. The business was commenced in 2007 in Tamilnadu.

With pan India operations, the company is focused on providing financing solutions for individuals and MSEs that are underserved by formal financing channels. It takes care of such businesses while providing a comprehensive banking and digital platform for all.

Quick Stats on Equitas Holdings
Founder Vasudevan Pathangi Narasimhan
Year Founded 2007
Origin Tamilnadu
No. of Employees 10000+
Company Type Public
Market Cap Rs 3,814.38 Crore (2022)
Annual Revenue Rs 585.7 Crore (2021)
Net Income/ Profit Rs 28.58 Crore (2021)

 

Products & Services by Equitas Holdings

Equitas Holdings has been financial industry and so it provides plans & services in:-

  • Micro Finance
  • Small Enterprise Loans
  • Housing Finance Services
  • Used Commercial Vehicle Finance


Competitors of Equitas Holdings

Equitas Holdings competes with many other financial companies. The top 5 competitors of Max are –

  • Bajaj Finserv
  • HDFC AMC
  • AB Capital
  • ABSL AMC
  • Chola Fin Hold


Now, we have a clear picture of the company’s core business. Let’s talk about the SWOT Analysis of Equitas Holdings.


SWOT Analysis of Equitas Holdings 

SWOT analysis examines the strengths, weaknesses, opportunities, and threats that a firm faces. SWOT Analysis is a tried-and-true tool that enables a company like Equitas Holdings to compare its business and performance to that of its competitors.

It will give us a strategic analysis of its internal and external environment, which is crucial for understanding the SWOT Analysis of Equitas Holdings.

To better understand the SWOT analysis of Equitas Holdings, refer to the infographics below:

SWOT Analysis of Equitas Holdings - SWOT Infographics of Equitas Holdings

Below is an explicit guide to the SWOT analysis of Equitas Holdings.

Strengths of Equitas Holdings

Equitas Holdings, being one of the leading companies in its industry, has several benefits that help it flourish in the marketplace. These strengths not only help it retain market share in existing areas but also help it break into new ones.

  • Broad Geographical Reach: Equitas Holdings Ltd has a large dealer and associate network that not only assists in providing efficient services to clients but also assists in managing the challenges faced by the consumer Financial Services industry.
  • First Mover Advantage: Although the financial services sector is saturated, Equitas Holdings has the first-mover advantage because it was one of the first companies to start small finance banks in India following the RBI accord.
  • Multiple Revenue Streams: Equitas Holdings Ltd has dabbled in a variety of industries outside of the financial sector throughout the years. As a result, the company has been able to diversify its revenue sources beyond the Financial sector and the Consumer Financial Services section.
  • High-Profit Margins – Despite facing downward profitability pressure, Equitas Holdings Ltd still has larger profit margins than its competitors.
  • Broad Range of Portfolio: One biggest strength that Equitas Holdings has is that it offers a wide range of financial and consulting services to its customers ranging from investment banking, asset management, private banking and insurance.
  • Automation of Activities: Successful automation of banking activities with a well-developed IT structure and Infrastructure has made the overall efficiency better.    
  • Talent Management – Human resources are crucial to Equitas Holdings Ltd’s growth in the Consumer Financial Services market. The company employs a highly qualified team. This is due to their outstanding training and education programmes.
  •  


Weaknesses of Equitas Holdings

A company’s weaknesses keep it from realising its greatest potential. To assist the company to excel in all areas, one should assess the weaknesses and seek to improve them. 

  • Cash Flow Problems: There is a lack of proper monetary planning at Equitas Holdings in regards to cash flows, leading to certain situations where there isn’t suitable cash flow as needed leading to unnecessary unplanned borrowing.
  • Need to Invest More in New Technologies: According to the country’s scale of expansion and the geographical areas Equitas Holdings needs to invest more funds in technology to coordinate the processes across the board. Currently, the investment in technology is not on par with the vision of the company.
  • Depend on India & Southeast Asia: Equitas Holdings’ global presence is not up to the mark. The bank is dependent more on the Indian & South Asian regions. Also, Equitas Holdings lags behind the top Southeast Asian financial institutes in terms of several branches. 
  • Customer Service: Improper customer service, as well as a lack of solving customer queries, can cause a negative image of the brand. This can either be through mouth publicity or by any other means.
  • Lack of Coverage in Rural Areas of Financial Products: It has been revealed that the financial service industry focuses more on urban areas in most countries, while rural regions are ignored. In the financial sector, this is a considerable weakness.


Opportunities for Equitas Holdings

Opportunities are external variables that work in the company’s favour, and the company can take advantage of them to grow.

  • Moderate Growth Rate: Following a moderate growth rate in the business, a financial uptick and increase in client spending provide an opportunity for Equitas Holdings to attract new clients and increase its share of the total industry.
  • Global Opportunities: A major opportunity for financial service players in the Indian market is the global financial service market, it is inarguably that the global market is worth billions of dollars. Equitas Holdings is mainly focused on the Indian market, so it needs to increase its reach outside the Indian market as well making it gain more customers.
  • Development of Technology: Since the FinTech industry is growing at a very rapid pace, there are advancements in technologies too. Using these kinds of technologies can increase efficiency and decrease cost.
  • Interest Rate: Lower interest rates than compared to previous years provides an opportunity for Equitas Holdings to undergo expansion projects that are financed with loans at a cheaper interest rate.
  • Low Inflation Rate: The low inflation rate can bring more stability to the market and enable credit at a lower interest rate to the customers of Equitas Holdings.


Threats to Equitas Holdings

Threats are external elements that may have an impact on the bank. To avoid inflicting damage to the company, these concerns should be addressed as quickly as feasible. The threats to Equitas Holdings are as follows:

  • Global Competitors: If Equitas Holdings wants to expand its business around the world, they have to be careful of what policies they make or how they provide its services in the foreign market or how they market themselves, where already existing local banks are what the people trust in. 
  • Increased Marketing Efforts: Due to the rise of digital marketing, there is an increasing number of promotional messages are being sent by competitors. It clutters up the space, which leads to losing out on customers. Equitas Holdings is well versed and trying to adopt a variety of the latest digital marketing skills to get ahead of the competition. You must also check out these skills to achieve the same.
  • Financial Risks: Because the company operates in several countries, it is subjected to currency fluctuations, which are exacerbated by the world’s increasingly volatile political climate in a variety of industries.
  • Lack of Proper Cyber Security Systems: The current financial industry relies entirely on the cyber-world. Whether it is data storage, monetary transactions, or personal information, everything is stored digitally. This makes the financial sector a primary target for hackers who are seeking to benefit financially by leveraging flaws in the financial’s digital infrastructure. Institutes need to take effective cybersecurity steps to safeguard their records, they will face a significant cyberspace threat.


Now that we have come to the end of this thorough SWOT Analysis of Equitas Holdings. Let’s see the summation of this article in the conclusion.

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To Conclude

Equitas Holdings is a well-known financial services firm with a global reach. The SWOT analysis of  Equitas Holdings revealed that the firm is strongly reliant on its consumers and has great brand recognition and trust. It has a strong sustainable foundation and has a presence in all of the areas it services, but profits and losses have been variable in recent years.

With rising competition in a saturated industry like finance, corporations are left to fight it out by improving their marketing efforts to win over their customers. Being well-versed in digital marketing is a requirement for all marketing enthusiasts in today’s shifting scene, where it is of vital significance. If you want to learn more and improve your skills, take a look at our 3 Months Advanced Digital Marketing course where you can learn everything about digital marketing in-depth just like this case study. 

We hope this blog on the SWOT Analysis of Equitas Holdings has given you a good insight into the company’s strengths, weaknesses, opportunities, and threats. You can also read our comprehensive study on the SWOT Analysis of JP Morgan Chase.

If you enjoy in-depth company research just like the SWOT analysis of Equitas Holdings, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of Equitas Holdings in the comments section below.

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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