Episode 72 - Banking as Bridge Building with Collin Timms
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Collin Timms is the Founder and Chairman of Guardian Bank in Bengaluru, India. In a city and country where loan sharks prey on people every day, Guardian Bank is a bright spot.
While banking is a largely impersonal system set up to avoid risk by tying creditworthiness to capital instead of character, Collin and his team take a different approach.
Inspired by faith that sees the infinite worth of each person, Guardian Bank provides a more humane view to the money lending process that provides hope for everyday households and commercial customers.
Episode Transcript
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Collin Timms: That morning, I put on my clothes and I, I reached out into the cupboard and I thought of a wad of notes. It was a good bundle. It was ten thousand rupees. And I put it into my pocket and I left home and I said a small prayer and I said, God, let me start every day like this with a lot of money in my pocket and good intentions in my heart.
Henry Kaestner: Welcome back to the Faith Driven Investor podcast. It's awesome to have you all back, William, my co-host. How are you?
William Norvell: It's good to be here. It's a great day to talk about investing, you know?
Henry Kaestner: Well, actually, every day is a great day to talk about investing. Today, though, is not only that, it's a great day to talk about investing and take a little bit of a side trip to India, which is one of my favorite countries. If you haven't been, you need to go. This is going to sound too pejorative. It's much better than this. But I call it an assault on the senses. But it's just an overwhelming to the senses. It's just the sights in the smells and it's the colors. I mean, just the colors in India are just amazing. So today we're in Bengaluru, which a lot of people also know is Bangalore, of course. And we're talking to Colin Temes from Gardian Bank. And this is one of those times for you as a listener to go and spend some time in the show notes because there are some links to some videos that will do a better job than William and I will about talking about the impact of Colin and Gardian Bank and what it's made on our lives. You'll be able to be brought into it through this great partnership we have with Faith EMCO and Faith in CO is itself an initiative out of Seattle Pacific. And this is actually really good time for us to plug the small group, the FDE group that we have. The FDE group is a collaboration that we've done with the Faith and initiative in Seattle Pacific and then also with JD Grear. We have an eight week series where we bring together cohorts of entrepreneurs all around the world. We have three hundred of them going through it right now, I think in the next one. Our plan is I think in the fall we have a thousand faith driven entrepreneurs going through these groups. And what you do is you have this three minute story at the beginning and then you have teaching from JD Greer for about 15 minutes. And then there's a group facilitation. It's really a cool thing because you get to participate in it with other entrepreneurs at your stage all around the world. And so it's a lot of fun. So that's Seattle Pacific. That's a plug for them. And then also for the FDE group, which you'll find both of those on our website. But before any more time goes by. Colin Timms, thank you for joining us. Welcome to the program.
Collin Timms: My pleasure to be here and talk to you, Henry.
Henry Kaestner: Well, thank you. And as we get started, we do this, of course, with every guest we have. We'd love for you to give us a flyover of who you are. Who are you, where do you come from? What are the steps in your professional life that have gotten you here? But but we have faith into that, too. When did faith become a part of your work?
Collin Timms: Well, I'm basically an Indian. I have this strange name calling Daems because and what they call an Anglo-Indian, you know, some God knows how many generations ago there was some ancestor of mine who came out of the United Kingdom. And we are the legacy of the one hundred years of British rule in India, a very, very small community of people. So I grew up in a small town about 60 kilometers away from Bombay and basically lived most of my early life in a lower middle class family with dreams of doing well, doing business and becoming a rich man one day. And many of my ambitions met with success and many of my dreams came true. And that's when I realized that there has to be more to life than just making money, because making money ended up becoming much too easy. And there was a internalization of thought and introspection for a few years. And then I felt that in the rediscovering of the practical part of the Christian faith, of service, of helping people is where the greatest satisfaction, the deep satisfaction and wellbeing for me. And that's the part I was set on roughly about maybe about twenty five years ago. And I've been on that path ever since.
Henry Kaestner: So we was going to get more into the banking part later. But I do want to ask one thing, because some number of people are going to be thinking India banking. Is this microfinance? Can you give us just a quick description of what Gardian Bank does? And then I want to kind of get back into how you get into that a little bit more, because I know there's some great stories on that. But Gardian Bank, would you consider yourselves in microfinance or are you somewhere in the middle? Is it a more traditional banking? Just tell us what Cardium Bank is real quick, please.
Collin Timms: So it's important to understand the financial services landscape of India. There are various kinds of banks in India. They're government owned banks, which we call the PSU banks, public sector unit banks. They are the large bank like State Bank of India and so on. Then there are commercial banks with a privately owned private commercial banks like they see the product in the US and so on. And then they would be foreign banks will set up shop in India for many, many years, like Citibank and Standard Chartered, ANZ within days and so on. And then there are regional banks that are set up in the cooperative structure. Urban cooperative banks and regional cooperative banks, Gardian Bank is something that I founded about 22 years ago, and at that time, the way I set up a bank with the least amount of entry point capital was a co-operative bank. And so I went in for that kind of a structure. So we are an urban co-operative bank, which means that we can do all banking activities, unlike nonbanking finance companies. Microfinance is largely done in India by one banking finance companies, which are restricted to only giving out loans, raising capital through borrowings and not through public deposits. But there is a co-operative bank and take public deposits and give out that money in various ways, including microfinance. So we do a wide spectrum of financial services, but we are also restricted in many ways because of our cooperative structure. And that is one of the negative points of being a co-operative bank the way we are. But right now, we're in the process of transitioning from a co-operative bank into commercial small finance bank. So the new banking entity that has been created in India to look at the bottom of the pyramid financing and what we are called a priority sector financing in India, and those are all small finance banks, but they are in the company structure legally. They are designed to be companies, unlike what we are right now, cooperatives, and they can operate nationally and without the restrictions that we are faced with right now.
Henry Kaestner: So I've long been taken with microfinance. I used to serve on the board of a great ministry called Hope International that engages in that. But one of the things that I was impressed with when I went and spent some time with India was that it didn't seem that there are many institutions that could help small companies that were hiring people. Microfinance did some great things in terms of financial poverty alleviation and spiritual poverty alleviation, and I've continued to be drawn to that. But again, it didn't seem that there's much set up. If I had a bike shop and I wanted to expand to the next town and I wanted to hire five or 10 workers. Is that something that you all can do? A guardian?
Collin Timms: Yes. To microfinance is the main objective is to draw people out of poverty. I do have a foundation for the Bridge Foundation, which has been involved in microfinance for over 30 years now. So we understand microfinance very, very well, microfinance, the Bridge Foundation and most microfinance organizations around the world. Their main objective is to impact poverty. Microfinance is a means used to impact poverty, and the microfinance is directed to micro enterprises that somebody started could be in a village or a small village, petty shop or a basket of things that she buys from the market and says door to door. The idea is to empower people to lift themselves out of poverty with a little bit of financial support from the institution and a lot of entrepreneurial zeal and hard work from the individuals themselves. Now, it is quite different from banking. What we do is, is a wide spectrum of banking, which may include microfinance. We do have a microfinance program, but we also do other forms of other financial services for the individual. So it would handhold the individual right from getting a loan of maybe one hundred dollars right up to getting a loan of a million dollars. The entire spectrum can be offered by an institution like Gardian Bank.
Henry Kaestner: So, Colin, tell us about the story, the origin story of guarding back how to get started. What drew you to it?
Collin Timms: Well, like I was saying, I reached a point in my life where I began to introspect and look inwards and try to find that level of satisfaction and peace that I just could not find in acquiring companies and building businesses and chasing dreams and opportunities. And I was skilled at business, and that's what I understood. I knew and I didn't know how to serve. What should I do? I knew I needed to do something with this. I knew I felt very deeply that God blessed me with a lot of good fortune, a lot of blessings of health and happy family and everything. And I needed to give back and I wasn't sure how. And then I got a call from my local pastor and he said that I know you're a businessman and I have this guy who was talking about doing a small business and maybe you can talk to him and maybe you can help him out. He wants to borrow some money from me. I don't have any money to give him, but maybe you find it worthwhile to help him out, to lend him some money. So I told him, I'll come to your office if you call him to the office at a certain time, and I'll come then and have a word with him. And that morning I put on my clothes and I. I reached out into the. But then I thought of a lot of notes. It was a good panel, it was ten thousand rupees and I put it into my pocket and I left home and I said a small prayer and I said, God, let me start every day like this with a lot of money in my pocket and good intentions in my heart. And my prayer has been answered. I start every day like that. It's never changed. And that's where it started from and from. That led to trying to seek opportunities to use this skill that God had bestowed on me, of understanding businesses very quickly, looking for opportunities and developing them. And somewhere along the way, the opportunity arose to start a bank. I'm no banker. I'm an engineer by profession. I'm not even a financial expert of any kind. But I read about banking. I learned whatever there is to learn about banking. And I managed to get two thousand six hundred people to put small amounts of money together and created own bank. Sometimes people tell me that it is a miracle that it's happened and I completely agree with them. I look back and I wonder how the hell did I do it myself, you know? So that's how it happened. Along the way, it has been bordering on obsession with me, completely focused on it. Even now I go to the bank every day, do I don't have to do so, but it's going and be still functioning. The bank has to operate and I still feel I have to be that not much to do with Seppo. Encourage the staff and make them feel that, you know, if you are going to face this, I'll be the first one to face it. But that's how it is. That's been the journey and the motivation for me. I'm not a great churchgoer. I don't go to church that much. I don't give sermons and I don't sing. I can't sing to save my life. I don't I don't have any other way of glorifying was serving God. All I know is to go and do my work and Zarian back. And I believe that's the way I got Amen.
William Norvell: It sounds like you're doing a good job at it, which is fantastic. And one of the things I would love to dig into is the early days of Christianity and moneylending, because, you know, I've got a little history that's actually worked for a Sharia compliant private equity firm for a few years. And, you know, we had all kinds of intricate rules where we weren't allowed to use gold and metal in some contracts because they're used as of money. And as you know, Sharia compliant debt is a very intricate structure. I would imagine you've probably seen more of it than I have, but you know how to get around it, because they had a pretty good sense that, you know, the Bible actually had some negative things to say about debt and lending. And I think a lot of people probably listening here maybe have thought those things before of, wow, is the Bible telling us not to engage in that? Should I get a home loan? Should I not? I mean, those are specific questions, but I'd love to have you take us to. What do you think the Bible says? What do you think early Christianity had to do with lending and money and sort of the banking practices as we see them today?
Collin Timms: So that's a disclaimer. I'm no theologian and I'm no expert on Christianity and the theology.
William Norvell: Well, you're in good company now. None of us are great theologians either.
Collin Timms: So I read a paper sometime back that talked about the concept of banking, which is the concept of money lending. And what I gathered from that is that the early Christians were basically people who lived in fear. And they were in most of the time that the years and they lived in very close knit communities. And before that, the concept of money lending has always been there. As long as there's been a rich man and a poor man, there's been a concept of money lending. But what the early Christians introduced was the whole concept of community money. And that's what banking is largely, you know, no banker sits around with. It's not his money. He's lending out. He's lending the money of the community. So the community contributes money through savings, through deposits, and that money is then lent out to people. This is a concept that I would like to believe was invented by the questions that people contributed their resources together and then lent it out to those in need and those in need who took those resources that did not get it as a gift or a donation. They were obliged to pay it back and pay it back with interest. And that's how the corpus was protected and the purpose continued to grow. And I believe that that is the earliest form of banking that I can think of.
William Norvell: Well, that's fascinating. I had never heard that before, and as you run, Gardian, how do you feel? You know, obviously, you know, I assume truth and integrity and things like that are there. But is there any other ways in which your faith sort of influence, how you try to think about lending practices, how you try to think about interest rates? I don't know what else there could be, but just are there any other ways that you feel your faith influences how you run the bank and the actual practices that go on there?
Collin Timms: I think the most I get asked this a lot, what is an institution, how do you define an institution? And largely institutions are defined by their values and what defines us. Then we call ourselves Christians use a set of values that we choose to live our lives by. I don't believe it is the big Krosby that Amen X or the the caller. There'd be a way around that makes or the kind of preaching and the words that we speak. But it's the deeds, it's what we do and the values by which we do our daily work in whatever it is that we do is what defines us as Christians. If we want to be called followers of Christ, if we want to be called Christ, like in whatever it is that we do, we need to do it that way. And I think in banking, the sweet spot for applying those values, I have found in to sum it up in one word, empathy. You know, banking can become very, very impersonal, but banking can become very low touch, high tech and distant and cold because you'll find many bankers tell you that you can get too close to the borrower you can't get because at some point you've got to go and recover the money from him. You have to say no to him. Sometimes you have to deny him some services or some facilities. So it's very difficult to do that when you're close to somebody. And what is and what is lost out of that is the aspect of empathy. So this is something that I think we consciously want to correct in Gardendale. It's not that we sanction every loan that comes across the loan officers desk. There is many times that he has to deny the person surveys say, or even fire a subordinate. But you do everything with a degree of empathy. You do it with that feeling. And you know that in many ways is, I think, the distinctive factor that is there. And once you bring this whole element of empathy and once you feel the way that other person feels, it is very difficult to do all the negative things that unfortunately sometimes happen in banking, which is like a mis selling or overselling that and pushing people into debt, and it can be avoided and so on, because you know that this is going to come back to bite you sooner or later and it is against your core values. So I think empathy is the strongest factor that drives us.
William Norvell: That's good. That's good. I think that's a great way. And especially with banking. Right, exactly. What you just talked about, how so many people, if you can't get into their shoes with empathy and understand what's best for them, they can go wrong. Right. And there's no shortage of headlines of banks not serving their customers well and ending up in fraud and in the wrong places. So I love that. And I'm glad you were able to talk through that. And that leads me to think about could you tell us about your average customer? Who is it that you're serving mostly with Guardian Bank? And how do you think about that empathy? How do you think about serving them well and what's best for them?
Collin Timms: Our average customer would be, you know, in the Indian demographic you have if you draw economic pyramid, the economic profile of the population would form a pyramid with the largest portion being at the bottom, being the poorest people living on less than five dollars or ten dollars a month. And then there are different layers of that pyramid going up to the very top, the people living in billion dollar homes you may have read about. So India has it all. You know, we have the entire economic pyramid and it is a very, very flat, which means the bottom is very large. We have almost 200 or 300 million people that we got in banks of the layer of the economic pyramid that is slightly above the bottom most. We are, unfortunately, as a bank we are unable to. So those who had abject poverty and need without a job, homeless people like that. But we serve the lower middle class profile and that can be defined as people with a monthly income of anything between maybe three hundred dollars to about maybe a thousand dollars a month, between three hundred dollars to a thousand dollars a month combined family income, maybe two people earning that that kind of money. So that would be the profile of our client base. And they would be made up of schoolteachers, factory workers, you know, taxi drivers, people who made servants, janitors, shop assistants, all that the entire blue collar working community that we would be serving that is largely guarding bank serves at present. We do have about in terms of numbers, about ten, fifteen percent for the wealthy, a set of people. And we serve their needs, too. But we believe our calling is in serving this layer of the demographic.
William Norvell: That's great. And you said three hundred dollars. A thousand dollars of. And let you know we have a primarily US based audience, we do have some international audiences. I mean, could you let us into a layer deeper that maybe don't understand the Indian market quite as much? Are you helping them sort of checking and savings accounts? Are they getting loans on homes, loans to businesses that Henry talks about? What services are you typically offering your average customer?
Collin Timms: First of all, to have a savings account and to be able to generate some savings? We call it in our direct deposit account. We encourage them to save to put away a small amount of their income every month towards a saving food, then using that account for conducting all the other transactions that they would have to. And definitely a big need is, you know, providing them with the capital required for their house when they want to buy a housing loan, a loan for education of their children, both short term and long term loans on education and then business loans for them to recapitalize or roll small businesses into bigger ones. Those are very much what we do, create supplementary income by maybe adding an extra room to the house and renting that room out and finding supplementing them for what they do. We encourage them to create supplementary income to, in addition to the existing income, also loans to buy vehicles buying a two wheeler scooter that goes for the motorcycle gets them from point A to point B faster, makes them more efficient in whatever it is that they are doing. And a lot of them also get loans to buy a car to improve the quality of life and mobility and things like that. So it's a very wide spectrum of lending. We do a lot of work also in health care and education. That's going to be our focus going forward. Has care lending because healthcare is a serious issue. And, you know, you're reading about what's happening in India right now. It is nothing but exposing in the most cruelest form possible the weakness of our healthcare infrastructure in this country. It has always been like that, but it took a 19 second wave to completely laid back. So we want to be very active in that space going forward.
Henry Kaestner: Macfarlan the majority of our listeners know how big India is and they know it's such a large market and they may even understand a little bit about the culture. Maybe they've heard some things about Modi and Hindu nationalism and what that means for Christian aid workers in ministries. But can you talk just a little bit about what to look for Western European or American investor to think about coming into India can happen? I mean, what does it look like? And does any council you've got and here's what I'm trying to do here. I'm trying to make this actionable of sorts. We probably have somewhere, you know, a thousand people listen as podcasts and they're mostly accredited investors in the United States. And what I want for them to be able to do is to be inspired, encouraged by the stories we bring them. I also want them to be able to see that they can actually take steps and action and say, you know what, I'm going to get involved in India. There's ways for me to participate. The need is there now, especially to be able to invest in businesses because so many people have a heart for India but can't do that through Christian missionaries in ministries anymore. I'm hoping that you might be able to speak to that in response. I hope investors think about, yes, I can roll up my sleeves, I can get involved in India. It's not insurmountable. And boy, the time to invest is now because some of the other things that I might have otherwise done with my donation capital have been removed from me.
Collin Timms: Well, there's definitely scope to invest in a country like India simply because there is just so much to be done. You know, any field you can speak of, there is so much to be done. I'm no expert in other things, but I can tell you about banking and the Guardian Bank journey. We started out in bank 20 years ago with a very, very small capital, just thirty like. So we're pleased with that, maybe about fifty thousand dollars or so. And today we have a net worth of six or seven million dollars. And we are on the brink of our next big leap in growth to convert ourselves from a cooperative into a small finance bank, go national with what we do and be able to offer the products and services of what we offer in the way we want to offer it in a strategic manner focused on health care and education in this country across the length and breadth of this country. Now, that is a huge, huge potential because right now we are in the urban district only of Bangalore and being able to serve maybe four or five million people in this city alone. But imagine when the canvas that we are looking at is one point three billion people across the country. The growth potential is tremendous in whatever it is that can be done. This leads to two things. One is tremendous opportunity for economic investment. That's one way of looking at it. A great economic investment, a great save. Investment into an organization that can give you a reasonably good return over a long period of time, that can give you maybe three or four extra done in five years. In addition, a very powerful social impact, because if you choose and make the right investment into the right kind of organizations, the social impact that it can develop and deliver in terms of transformation of lives, of people that that organization touches is immense. Now, there may be many opportunities for economic return and financial return in many jurisdictions, many geographies around the world. But a combination of financial return along with social impact. Your best bet is countries like India, where there is a huge canvas to bubble here in terms of both economic growth as well as social development. So my message to your investors is to choose organizations whose institutions that are on a growth trajectory and with a viable scaling up plan and with very sound management people who have proved themselves in terms of integrity and capacity to deliver on the promises. And I don't think you can go wrong. There are many, many examples of success stories that we can talk about.
William Norvell: Macfarlan great advice. Thanks for sharing that with our audience. So in addition to Gardian, are there other great companies that you might point some folks to to check out the research, to look into?
Collin Timms: Or there are many, many companies in the engineering space that are companies in the pharmaceutical space. They have great growth stories. You know, we got a company in India called Glenmont Pharmaceuticals started by England and said today it's grown into a billion dollar company, started very small, and whoever invested in a friend of mine from UK was an early stage investor in it, cashed out with hundreds of millions of dollars. So, you know, there are great stories in the technology space, you name it. There are great stories. It would take a little bit of effort and handholding to find the right, because you can imagine there are many, many, many entrepreneurs and many people, many areas to invest many slots to put that check into. But you need to be patient and be vigilant about where you want to invest in the kind of place you want to invest in for those who would be interested in bankers in the next phase of its growth. And if there is any interest to anybody who is watching this, we could send information memorandum to them and they can look at it. If this space is of any interest to them, that's great.
William Norvell: And actually, my last question before we wrap up would be along those lines. Could you maybe give a closing, I guess, please, not the right word, because that's a little too strong. But, you know, high growth startups, equity, things like that are very exciting to people these days. Crowdfunding is taking off. Could you maybe give a closing, I guess, plea for why banking, such as what you do a guardian, is so important for the economic development of people that obviously God cares about because he made us all. But could you maybe just ERG our audience to pay a little more attention to the lending aspect of the investment landscape?
Collin Timms: I think the key factor here is sustainability. I've been a businessman all my life and I've chased the 10x return and ended up with no return. And then I have learned to be satisfied with the two and a half X return, and I know I'll get that fixed if I put it in the right place. So sustainability over a long period of time is extremely important, especially when you are investing in a developing country like India and a developing jurisdiction. Now, there are many, many unforeseen circumstances and many factors that can interfere with your venture. Excel spreadsheet growth plans know it's very easy to draw those things up, but it's very difficult to foresee all legislative changes, regulatory changes, interest rate shocks, currency shocks, natural disasters. And you are seeing lockdowns and things like go with it you and completely disrupt and transform business plans and business trajectories. So it's very important to focus on very strong and stable kind of businesses, especially in developing markets that have a long term sustainability and a long term growth. And banking happens to be one of them. Manufacturing is another one if you get it right, if you get the manufacturing right, almost every second person in India, whereas Bata shoes, you know Bato. He's a check individual who Kamia some seventy five years ago to India and invested here, and it's a household name. I mean, I don't think Bato is as famous in the Czech Republic as it is in India. So, you know, people have come here and invested very, very early on and benefited a great deal, but they've invested in something that is long term sustainable. So my suggestion to people with capital is, you know, the higher the return and you know this, I shouldn't be telling you this, the higher the return, the higher the risk. But there is a large number of unseen circumstances in countries like India and countries in the developing world that you have to take cognizance of. And maybe you should recalibrate your thinking to a more reasonable rate of return. And in return, you what you would get is more social impact and I think more long term sustainability.
William Norvell: That was pretty good. That was pretty good. Thank you so much for walking us through that. And I think hopefully you'll have a lot of people more interested in the space than they were before they started this podcast as we wrap up. We love watching where God can intersect our listeners and our guests. And so the question we love to ask is, is there a place in God's word in scripture that you might want to share with our audience that's been particularly meaningful to you or could be something you read this morning, but a scripture verse or a story from Scripture that maybe has guided some of who you are and where you are today?
Collin Timms: Well, if there is one thing that motivates me and guides me and keeps me coming back to the plow is that this feeling that I have and it permeates my thoughts and permeates my subconscious, my dreams, I just feel I have to keep doing the best I can in whatever it is that I'm doing. And I believe that is my calling, that I have to do more and more of that. And whenever I, I get bouts of doubt in that, it comes in the form of the I look around me and still see so much of poverty and still see so much of misery, especially in these times when we're seeing this and what's happening in college and all of that, then God gives me some small successes and that just to get my chin up again and just to remind me that what I am expected to do is to do the best that I can do and leave the rest to him. I have more control over what will happen. And God doesn't appear to me the way he does to people in scripture and all of that. But this is something that I keep feeling from deep within is that I have to continue to do the best that I can do.