92.7% of MSME owners earlier had no financial inclusivity and depended mostly on self-finance.
- 139 merchants across seven cities interviewed, different business segments and ownership models included.
- So far NeoGrowth has disbursed over Rs. 35 Billion in loans under its impact lending model.
Mumbai, November 13, 2018: NeoGrowth Credit Pvt. Ltd., the pioneer in digital lending for SMEs in India, recently commissioned ASCo, India’s leading transaction advisory firm, to audit the impact that NeoGrowth loans have had on the lives of retailers in terms of business growth, women empowerment, job creation and fostering entrepreneurship. So far NeoGrowth has disbursed over Rs. 35 Billion in loans under its impact lending model.NeoGrowth, a registered NBFC with RBI, has already generated a lot of positive response by facilitating credit assistance to a massive under-served segment of Indian entrepreneurs across the country.
The independent report was prepared after interviewing 139 customers of NeoGrowth across seven cities including Hyderabad, NCR Delhi, Mumbai, Kolkata, Lucknow, Bangalore and Vijayawada. Only borrowers with lending activity between April 2017 and March 2018 were selected, and the sample size was carefully developed to include different industries, constitution of enterprises, varying loan amounts and gender.
The study revealed that a massive 73.4% of merchants borrowing from NeoGrowth were first generation entrepreneurs who had approached NeoGrowth for funding requirements. The report highlights that the extent of financial exclusion for first time entrepreneurs is very high. Statistics compiled in the Fourth Census of MSME sector reveals that majority of units i.e. 92.77% had no finance or depended on self-finance. NeoGrowth’s collateral free loans, which are independent of the entrepreneurs CIBIL scores has assisted a number of entrepreneurs’ kick-start their business projects, providing an overall fillip to the economy.
Commenting on the report, Piyush Khaitan (PK), MD & Co-founder, NeoGrowth said, “NeoGrowth has been conducting these studies every year to understand the impact generated on-ground from the business activities of its customers. Since traditional underwriting methods in India exclude more than 50% of creditworthy SMEs due to insufficient credit history or lack of collaterals, a substantial amount of the country’s potential business and economic output remains untapped. This annual social impact report prepared by an independent third party has further underlined NeoGrowth’s commitment in boosting entrepreneurship and job creation, thereby enforcing our mission of creating a positive impact in society.”
Remarking on NeoGrowth’s tech-focused operations, PK further added, “Our state-of-the-art tech enabled processes ensure that the financial performance of each borrower’s business is analyzed in detail and through diverse metrics. The very fact that we have been able to cater to such a significant number of first-time entrepreneurs, who have all impacted their immediate economy by creating a number of income opportunities through their business activities, gives us further encouragement to enhance the scope of the Indian financial ecosystem and cater to those that need it the most.”
NeoGrowth’s operational innovations have seen them partner with more than 13,000 business merchants across 21 cities to grow and diversify their enterprises. NeoGrowth’s tailor-made approach using digital payments has also helped the entrepreneurs to efficiently manage their daily cash flows.