Credit and finance for MSMEs: The company’s gross non-performing assets (GNPAs) ratio improved from around 12 per cent at the financial year’s beginning to 4 per cent by the end of the year.
Credit and finance for MSMEs: Digital lending non-banking financial company focused on MSMEs NeoGrowth has reported growth in its assets under management (AUM) to Rs 1,850 crore for the financial year 2022-23 from Rs 1,550 crore in FY22. In terms of disbursements, the company disbursed loans amounting to nearly Rs 1,900 crore in FY23, up by 30 per cent from the previous fiscal. Around 30 per cent of the loans were towards supply chain finance designed for vendors, manufacturers, suppliers or service providers who serve large corporates and around 70 per cent were into retail finance for customer-facing businesses.
Moreover, the company’s total income grew from Rs 360 crore in FY22 to Rs 380 crore in FY23. The net margin also grew by 7-8 per cent.
“In H1 of FY23, there was no (AUM) growth as we were in the process of optimising our portfolio amid a lingering impact of Covid and also we were in between a fundraising process but in the second half of the financial year, we grew by 40 per cent. Quarter on quarter, we grew by 12 per cent,” Arun Nayyar, Managing Director & CEO, NeoGrowth told FE Aspire.
The portfolio, said Nayyar, also improved towards the end of FY23. The company’s gross non-performing assets (GNPAs) ratio improved from around 12 per cent at the financial year’s beginning to 4 per cent by the end of the year while its net NPA ratio was 2.2 per cent.
“The overall asset quality has completely changed as Covid impact has waned. We are comfortable with that (NPA) number as we are serving SMEs with collateral-free loans. If we lend at a lesser risk cost, we would exclude a large population of SMEs we want to serve. Our overall income is around 25 per cent on the business we do, so we have risk absorption capacity,” said Nayyar.
NeoGrowth’s repeat customers or renewals had a 45 per cent share of its business. The company expects 40 per cent AUM growth in FY23 along with adding around 10,000 new customers. It has so far served over 1.5 lakh MSMEs. Moreover, it also expects to enter into the co-lending model in the second half of the current financial year.
The company has so far raised $188.9 million as per Crunchbase data from Omidyar Network, Lightrock, Khosla Impact, Accion Frontier Inclusion Fund – Quona Capital, IIFL Seed Ventures Fund, WestBridge, FMO, etc.
