R Thyagarajan established Shriram Chits at the age of 37 in collaboration with friends and relatives.
Shriram Group’s founder R Thyagarajan believes in helping others. He views lending money to underserved individuals as welfare, as it caters to the poor and those overlooked by traditional banks. Thyagarajan’s approach involves providing loans at more affordable rates, demonstrating that lending can be both secure and lucrative. This showcases his belief in making financial services accessible while maintaining profitability. Thyagarajan gave away almost all his wealth, that is $750 million (Rs 6120 crore) to some of his employees. He is happy with his small house and a modest car, and he doesn’t own a mobile phone.
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During an interview with Bloomberg News, Thyagarajan emphasised that his entry into the industry aimed to debunk the notion that lending to individuals lacking credit histories or stable incomes is excessively risky. He believes his approach demonstrates that such lending can be less risky than commonly perceived. Additionally, Thyagarajan mentioned that his business strategy and the choice to offer a stake in Shriram are not unconventional, as per reports by Bloomberg News.
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In the interview, Thyagarajan mentioned, “I lean towards leftist beliefs. My focus wasn’t on improving the lives of those who are already well-off.” Instead, he aimed to alleviate difficulties for individuals facing challenges. Thyagarajan notably distributed a significant portion of his wealth among a select group of employees. Notably, Shriram Finance Ltd, the main company under the group, experienced a remarkable increase in its shares, reaching an all-time high in July with a surge of more than 35% in the current year.
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“People held the perception that lending was highly risky due to the elevated interest rates,” Thyagarajan noted, further explaining, “I came to understand that the risk was not substantial as it seemed.” In the realm of truck financing, Thyagarajan observed individuals facing interest rates as high as 80% since conventional banks were hesitant to provide loans to them. Hailing from an affluent agricultural family in Tamil Nadu, Thyagarajan established Shriram Chits at the age of 37 in collaboration with friends and relatives.
Established in Chennai in 1974, the Shriram Group’s current valuation exceeds $750 million (Rs 6210 crore), with a workforce of 108,000 individuals. Thyagarajan pursued mathematics during his undergraduate and master’s studies in Chennai, followed by a three-year tenure at the Indian Statistical Institute in Kolkata. According to Bloomberg News, Thyagarajan remarked that he has consistently possessed an analytical mindset with a focus on egalitarian principles.
