Why NBFC Improvement Programs Fail to Deliver ROA Impact
- sushant pande
- Mar 19
- 2 min read
The gap between activity and outcomes
The Starting Point
Most NBFCs today already run some form of internal improvement program.
There are reviews.
There are initiatives.
There are dashboards tracking progress.
And in many cases, these are well designed.
Yet over time, a familiar pattern emerges:
Improvements are visible in activity — but not always in outcomes.
Where It Starts Breaking
The issue is rarely intent.
It is usually in how improvement is structured and sustained.
Across NBFCs, a few patterns show up repeatedly.
1. Ownership Sits Within Functions
Most improvement programs are anchored within a function — operations, risk, or business.
But outcomes like ROA are inherently cross-functional.
Sourcing quality affects collections
Credit decisions impact future PAR
Operations design influences cost
When ownership is not shared, interdependencies get missed.
2. Activity Gets Measured More Than Outcomes
Programs tend to track:
number of trainings
audits completed
process rollouts
These are necessary.
But the harder linkage is often missing:
Did PAR actually improve?
Did cost per collection reduce?
Did sourcing quality become more stable?
Without this linkage, activity creates comfort — not impact.
3. Improvement Rhythm Changes With Leadership
As leadership priorities shift, so do improvement agendas.
What was critical last quarter may not be tracked with the same intensity today.
Over time, this leads to:
partial implementation
loss of continuity
repeated restarts
Institutional memory becomes dependent on individuals.
4. Blind Spots Remain Unchallenged
Internal teams understand the business deeply.
But familiarity can also create blind spots.
Certain structural gaps — especially cross-functional ones —are difficult to identify
without external challenge or benchmarking.
5. Benchmarking Stays Internal
Many programs evaluate progress against:
last year’s performance
While useful, this is not always sufficient.
Without external benchmarks:
underperformance may go unnoticed
targets may not stretch the organisation
The Result
Gaps are identified.
Actions are initiated.
Reviews are conducted.
But closure often slips into the next cycle.
And the expected ROA movement does not fully materialise.
What Works Differently
Sustained impact typically requires three shifts:
1. Cross-functional ownership
Improvement areas are owned jointly, not within silos.
2. Direct linkage to metrics
Every initiative is tied to a measurable outcome — not just completion.
3. Continuity in execution
Programs are designed to survive leadership and priority changes.
The SARTHI Perspective
At EasyProblemSolving, SARTHI is built around this exact challenge.
It looks at Leadership, Processes, People, and Performance together —ensuring interdependencies are addressed, not missed.
More importantly, the focus is not just on identifying gaps.
It is on staying involved through implementation until closure is visible in metrics — not just in presentations.
Closing Thought
Most NBFCs are not short of initiatives.
The real challenge is translating those initiatives into sustained outcomes.
That requires not just better ideas —but stronger linkage, ownership, and follow-through.
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