Arun Nayyar, Whole Time Director -; CEO, NeoGrowth

21 Apr 2022 , 02:38 PM

In an interaction with Mamta Maity, indiainfoline.com, Mr. Arun Nayyar, Whole Time Director & CEO, NeoGrowthsaid Since our inception, we have endeavoured to create a positive social impact on our customers’ lives through our offerings.

What are the key strengths of the company?

NeoGrowth has disbursed close to ~USD 1 billion worth of loans and has created an impact on over 1 lakh small businesses across 70+ industries spread over 25+ cities in India. This has helped us get a deep understanding of our customers and their business needs. Our solutions are designed to address these needs, and we have a tailored approach across our different customer segments.
Technology and data combined with a deep understanding of the customer segment are our key strengths.

We leverage the digital payment ecosystem to assess the customer with underwriting based on digital transactions data, creating financial access for small businesses. We have a unique daily repayment option that helps our customers manage cash flow better and reduces the debt burden.

How is the company leveraging its digital capabilities to ensure a seamless and speedy loan journey for MSMEs? Have you introduced any innovative solutions for SMEs during the pandemic?

India is leading the way in the adoption of digital payments. In the financial year 2022, UPI transactions crossed over the USD 1 trillion mark, (or INR 83.45 trillion), along with strong growth in other digital payment modes like cards payments, IMPS, NEFT, and RTGS. It is expected that by 2025, digital payments in India will reach 186 billion by volume and INR 238 trillion by value.  At NeoGrowth, we leverage digital transaction flows to assess and provide business finance to our customers.

We have developed strong data science capabilities which ensure objective decision-making. Our seamless digital customer journey backed by our statistical scorecards enables us to provide a loan approval within minutes.

We have introduced a new offering called diGibizz, which helps use our platform beyond financing and provides holistic solutions to run their businesses effectively. We have over 50000 users on the platform within a year of its launch.

What were the support measures taken by the company for its customers during COVID?

Since the beginning of the pandemic, we followed a customer-first approach and created a value-based offering for the customers which truly empowers them. ‘Empathy with Empowerment’ was the central idea behind our Sanjivni program that we launched to support our customers to tide over the COVID disruption. We worked closely with our customers and provided them with solutions to manage their liquidity and reduce the overall debt burden.

Through diGibizz, we were able to help MSMEs upgrade digitally and serve them in an integrated manner as they prepared themselves for the next phase of growth.

How is NeoGrowth promoting financial inclusion?

Since our inception, we have endeavoured to create a positive social impact on our customers’ lives through our offerings. Our customers include aspiring young entrepreneurs, new to credit customers, women entrepreneurs, and essential service industries like healthcare, pharmacies, and protection services such as insurance, among others, who are underserved due to challenges such as lack of documentation and credit history.

We have simplified loans for small businesses through our products and made formal credit accessible for them. We help advance sustainable development and address societal challenges such as lack of access to capital, lack of support for entrepreneurship, and gender inequality.

Our portfolio saw a substantial rise in the number of women borrowers during the pandemic, with a 100% increase in the proportion of women borrowers in the last year. In FY 2022, approximately 16% of our loans by value have been extended to businesses that were run by women either as sole proprietors, partners, or directors.  The New to credit customers, who took a loan from us, were able to build a credit history. In the last 3 years, 66% of such customers funded by NeoGrowth have taken an external term loan post getting funded. This financial year, 25% of our loan disbursals have been in Tier-II cities, and close to 7% have been to pharmacies, clinics & labs, pharmaceuticals, and other healthcare businesses.

What is your outlook for FY 2022-2023? What will be the key growth drivers for the company?

We are well-poised to build on the strong demand from the recovery in the economy. Our learnings on the credit behaviors of small businesses have been accelerated due to the disruption, thereby, enriching our underwriting models. The resilience of our business model has now been tested through the cycle.

Our strong market presence, sharp customer segmentation, customized products, data, and technology capabilities along with tailwinds from a buoyant digital payment ecosystem are key drivers of our future growth.