By Ananya Upadhyaya
Credit and Finance for MSMEs: Over 22 per cent of small businesses that availed loans in the fiscal year 2022 were run by women, according to the annual Social Impact Report by MSME-focused digital lender NeoGrowth. Based on a survey of 250 NeoGrowth customers in 7 cities, the report noted that loan disbursals to women borrowers have grown exponentially at a compound annual growth rate of 72 per cent since FY 2015, “signifying gender equality”.
NeoGrowth said that it also supported the government’s financial inclusion agenda, by advancing 60 per cent loans to emerging small businesses that have been in operation for less than or equal to five years, 36 per cent to young entrepreneurs below 35 years of age while 38 cent loans were small ticket, of less than or equal to Rs 10 lakhs.
“MSMEs are the drivers of India’s economic and social development and are poised to play a critical role in catapulting India’s GDP to realise its $5 trillion dream. It is our responsibility to be a larger catalyst and trusted partner in MSMEs’ digital transformation journey and business growth story by facilitating lending to meet the evolving business needs of small and medium businesses across India,” said Arun Nayyar, Whole Time Director & CEO of NeoGrowth in a company statement.
The survey noted that 92 per cent of the respondents availed healthcare coverage in FY 2021-2022 “With the knowledge of health and wellness at an all-time high even in the MSME community.” The annual report explores the direct positive social impact of NeoGrowth’s business activities on employment generation, empowerment of women entrepreneurs and improvement of credit scores.
Neogrowth offers loans ranging from Rs 1 lakh to Rs 75 lakh to retailers, shops, merchants, manufacturers, wholesalers, traders, distributors, etc., for a tenor of six months to 36 months depending on the type of loan and borrower’s business performance. The company’s loan book grew at a 9-year CAGR (2013-2022) of 140 per cent to Rs 1,559 crore assets under management (AUM) in FY22. Presently, it serves MSMEs in over 70 industries across 25 cities.
According to an International Finance Corporation (IFC) and Intellecap report launched earlier this year, the estimated credit demand by women-owned very small businesses (WVSEs) in the country was Rs 83,600 crore.