MSME loans: MSME-focused digital lending non-banking financial company (NBFC) NeoGrowth has reported a growth in their asset under management by 49 per cent year on year (YoY) to Rs 2,298 crore for the second quarter of financial year 2024 from the corresponding period in the previous fiscal. The company also reported gross revenue of Rs 146 crore during Q2, up by 60 per cent from Q2 FY23.
According to the company, the loan disbursed to MSMEs and small businesses also increased by 40 per cent, reaching Rs 674 crore in the second quarter. During the year-ago period, the disbursement stood at Rs 483 crore. The company maintained its capital adequacy (CRAR) at 30.4 per cent, above the regulatory requirement of 15 per cent. CRAR is the ratio of a bank’s capital to its risk-weighted assets and current liabilities.
In terms of portfolio quality, NeoGrowth’s net non-performing assets (NNPAs) were at 1.6 per cent (over the number of loans provided) for the second quarter, while the return on assets (ROA) was at 3.4 per cent. Moreover, the operating cost to revenue of the company was 37.1 per cent. The company’s profit before tax (PBT) was of Rs 25 crore during the quarter, and its return on equity was 12.3 per cent.
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Arun Nayyar, managing director and CEO, NeoGrowth said, ”We are proud to have achieved a significant milestone in our journey towards profitable growth. The Q2 FY24 results demonstrate our continued focus on growth and profitability. Our strong performance highlights our commitment to keeping it simple for our customers with innovative product offerings. With our strong data science and analytics capabilities, we continue to strengthen our customer selection process and risk management.”
NeoGrowth currently has 26,000 active MSME borrowers in over 75 industry segments, across 29 locations. The company has disbursed loans of over Rs 11,000 crore to more than 1.5 lakh MSMEs. For FY23, the company had reported Rs 1,850 crore in AUM vis-a-vis Rs 1,550 crore in FY22. The company’s total income grew from Rs 360 crore in FY22 to Rs 380 crore in FY23.