Home loans in the Himalayas

Outsourcing is becoming increasingly popular in the mortgage broking industry. More and more offices are seeing the benefits of setting up operations abroad. In fact, Nepal was not the first destination on Mr Dargan’s radar.

“In 2011 we offshored some processes to the Philippines and India, but it didn't work,” he explains.

“The problem was we didn't know how to offshore successfully and we didn't want to invest in it fully until we saw some success.”

When a friend asked him if he’d be up for doing the famed Everest trek, the Sydney broker’s adventurous spirit kicked in and he agreed immediately.

“I didn’t even know what the trek was, how much it cost, what was involved – nothing. I just knew I wanted to do it,” he explains.

After falling in love with the country, Mr Dargan decided it would be a great place to open an office that could process loans from submission to settlement.

HLE Nepal opened in 2012 and today has almost 50 staff. The business’ core function of processing mortgages remains, but over the past few years the office has expanded its capabilities and provides additional support to the Sydney-based brokerage.

“We also have a marketing team, HR team, accounts team and compliance team. In the past year, we've also started a team that assists our brokers by following up long-term enquiries and marketing to our settled customers,” Mr Dargan says.

“I try to go to Nepal two or three times per year. It feels like a holiday even when I'm working there. It's a different pace of life.”

A trip to the office

Visiting the Kathmandu office of an award-winning Sydney brokerage was the perfect excuse to spend my annual leave in Nepal last year. Trekking the magnificent Himalayas was also a high priority. 

On my last morning in Nepal I found myself in a sweltering taxi moving slowly through Kathmandu traffic to the Home Loan Experts outpost.

HLE Nepal’s managing director Urika Shrestha met me at the Crown Plaza Hotel, a short walk from the office. My first question wasn’t about mortgage broking. I was keen to hear how the city was recovering from the 2015 earthquake. 

“It was a very difficult time for everyone,” Ms Shrestha said. “Our office wasn’t directly affected, but the city was in bad shape for a long time. People were moving out of their homes and camping in parks, fearing another aftershock.”

HLE Nepal is as much a home to its staff as any employee could hope for. The office is located in a large three-storey house with oversized concrete balconies.

The building is divided into five rooms over three levels, with a number of staff in each room dedicated to a particular lender. All support staff are cross-trained and regularly switch rooms to ensure they gain experience across all lenders.

Ms Shrestha started at the company three years ago as a 23-year-old support staffer. Within three months she was team leader. After recently completing her MBA, she is now the managing director, in charge of the entire operation in Nepal.

“Business hours are from 6am to 2pm,” she said, explaining that the business needs to work in sync with Australian time zones. “And breakfast is included.”

The office also has a large lounge area on the ground floor complete with an Xbox and Ping-Pong table – all the comforts of a modern Australian workplace.

“But there were a few cultural differences that we had to learn,” Ms Shrestha said. “For example, one of the brokers said ‘no drama’ at the end of a phone call.

“In Nepal, when someone says ‘no drama’, it means ‘I don’t want any trouble!’ Of course, in Australia it’s the same as ‘no worries’.”

About 10 per cent of the office’s support staff have visited Australia. Many have studied here and obtained degrees before returning to their home country and their careers with Home Loan Experts.

The business is also involved with local charities and actively supports children’s education, health clinics and sustainability projects.

In 2016, the brokerage won the Australian Broking Award for Social and Community Service Program of the Year, for its work on childhood education in Nepal.

Mr Dargan explains: “When we engage the community, we look at what is most effective and try and engage the community in Nepal rather than in Sydney. Now that doesn’t help with getting customers, but it does give a much bigger social benefit than if we were to invest in Australia.

“I think the key is something that the whole team can be passionate about and something that you can all believe in,” Mr Dargan says, “and for us that was childhood education in Nepal.

“So, we have worked with several partners over there to fund different activities that they are doing [because] we know that it is not our core strength to do those activities, so we’ve instead provided resources they need in order to do great things.”

Setting up shop

Home Loan Experts has made a considerable investment in its overseas operation. The company has developed a learning management system and employed a full-time trainer in Nepal and Australia.

“Our industry is becoming more complex and regulated,” Mr Dargan says. “The brokers who don't invest in training are already struggling and will be left far behind in a couple of years. The bank and MFAA webinars have been a big help since there's great ready-made content.”

So how difficult is it to get an office in Nepal up and running? “Extremely”, according to Mr Dargan.

He explains: “We had to apply for foreign investment approval. Outsourcing was a new industry in Nepal, so we had to register the industry as well. The government forms even asked how many tonnes of steel we would use,” Mr Dargan says.

“We had issues with work hours, infrastructure, political stability and utilities. But the main barrier is training. To train a team in a remote office is tough and you can't recruit people with industry experience, so all of the knowledge needs to come from our Australian team.”

It took almost three years for the office to become effective. But the business is clearly seeing the benefits. Home Loan Experts Nepal is now working with two other Connective brokers to assist with their loan processing.

“Offshoring for other brokers is a small part of our business and it's something that we'd like to grow slowly over time,” Mr Dargan says.

“We're only working with brokers we know at the moment, but maybe that will change in the future. We've been sharing our processes as well and we've all benefited from challenging the way we each work.”

Any brokers eager to set up their own operation abroad should note that it takes plenty of time and effort. However, once it's up and running the benefits back home can be huge.

But, Mr Dargan says he wouldn't recommend outsourcing unless you are planning to have at least five staff. “Otherwise it's more of a distraction than an advantage,” he says.

“Visiting the country and hiring your leadership team is the first priority and if it's done well, this will solve half of your problems.

“You'll also need to invest in your team visiting Australia for training so they understand our industry and get to know the banks.”

Do you have a business or community engagement program that you are proud of? Nominate yourself for an Australian Broking Award, submissions for which close tomorrow (21 April).

Now in its seventh year, the Australian Broking Awards — partnered by Commonwealth Bank — are the only industry awards focusing solely on the leading brokers, brokerages and aggregation groups in the Australian mortgage industry. 

See the full list of categories and submission documents for more information. 

[Related: Australian Broking Awards submissions now open]