We Aim To Touch 70K MSMEs Through Loan & DiGibizz Offerings By April 2022: Arun Nayyar, CEO, NeoGrowth Credit
How does NeoGrowth's daily repayment model help in making loans affordable and accessible for small merchants?
We pioneered the model of daily repayments in the NBFC ecosystem over 8 years ago, and even today, majority of our portfolio is based on this model. Daily repayments have become the preferred mode of repayment for our customers, who comprise small business owners, as it is more affordable than making lumpsum repayments. 60% of our portfolio is currently on daily repayment. The repayment process has been made simpler and convenient for our customers as they can use various payment gateways along with other offline channels.
NeoGrowth Credit has adopted a technology-first approach to financial resiliency. What does this entail?
As an organization, we are moving towards a completely seamless digital experience for customers, where the entire process – right from lead generation to loan origination, sanction, disbursement, and collections – is all taken care of digitally, with minimal human intervention. In all that we do, technology is the biggest enabler. We have equipped our teams with digital assets for different stages of the loan journey. Our Sales App enables 100% digitization of sourcing and tracking of loan application for our sales team. ‘YouNite’ portal has been specially developed for our DSAs (Direct Selling Agents) to enable higher lead generation coupled with quick incentive payouts. The ‘Customer App’, launched in FY 2020-21, helps customers access and manage their loan accounts, and our MSME customers can also use our exclusive ‘Merchant Portal’ to login and access their account, raise service requests and make loan repayments.
Please tell us about the type of loan offerings by NeoGrowth. How are these loans assisting small businesses in growing and meeting their objectives?
Our product portfolio extends from a secured loan product (Plus Loans) to an unsecured, instant, end-to-end digital offering (NeoCash Insta). We offer business loans to MSMEs with daily repayment options. Through our offerings we address different pain points of MSME borrowers such as lack of documentation or credit history. Along with their credit requirements, we also assist MSMEs in digitising various business operations through our ‘diGibizz’ platform. We recommend piece-meal digital solutions to them via our network of partners. These extend from managing payments digitally to creating their business websites through diGibizz. Today, over 37,000 small businesses have participated in the platform.
NeoGrowth uses “Deep Analytics” extensively to continuously tweak and evolve its credit risk models in tune with the changing market conditions and macroeconomic scenarios. How is modern technology helping you improve business productivity?
Analytics is used as a tool to solve problems across all functions at NeoGrowth. Our in-house analytics team supports regular optimization of our risk scorecards and development of models for several business use cases across lead management, acquisition, collections strategy and credit scorecard improvement. Our HR team too leverages an analytics tool, ‘HireSmart’, developed in-house, which takes key parameters from the CV of a candidate to predict his/ her performance and longevity with the organization. This helps the team in screening out an improper fit.
Please share NeoGrowth’s vision for the new evolution of Fintech in 2022.
Digitisation will continue to be the defining factor for financial services, especially in the MSME lending space as the ecosystem collectively focuses on digital financial inclusion. Product customisations will become the key to the success of any fintech offering. For NeoGrowth, digitization of MSME lending has always been the focus, even pre-pandemic. This year, we will further build onto the digital framework to engage customers in a customised, paperless, and frictionless ecosystem, and promote financial inclusion.
What are your views on the evolving new age lending models in India?
Increasing digital footprint and the rising availability of third-party data for verification and underwriting is making lending more flexible, scalable, and customisable for lenders. We are already seeing a shift from traditional balance sheet-based underwriting to flow based lending. In my opinion, the next couple of years will see Account Aggregator Framework making data a level playing field and democratizing access to formal and affordable credit.
Please brief us about your future expansion and funding plans. What growth strategies are you planning to adopt in 2022?
Our strategic focus continues to be to address the financial requirements of small businesses by leveraging the entire digital payments ecosystem supported by tech-enabled delivery. We will continue to build on our cash flow-based lending model. We plan to expand our unique proprietary platform “diGibizz” and bring out a suite of products and solutions to suit every small business owner at every stage of their growth lifecycle through our network of partners.
Currently, how many small merchants are associated with the platform? What is your target number for the upcoming year? How much growth are you planning to achieve?
Currently, we have over 20, 000 loan merchants associated with us and over 37, 000 diGibizz users. Overall, we aim to touch 70,000 MSMEs by April 2022 through our loan and diGibizz offerings. We will continue our focus on digital lending and the daily repayment model.
In the year 2021, what was the amount of loans disbursed by NeoGrowth and which sector was the most demanding for loans?
NeoGrowth’s current AUM is approximately INR 1500 crores, with monthly new loan origination run rate of INR 150+ crores. NeoGrowth serves two industry segments i.e., retail and supply chain within the SME ecosystem. The demand has been higher across both the segments driven by the economic bounce back in later half of 2021.
