BSE-listed Moneyboxx Finance Ltd, which finances livestock farmers, plans to expand its footprint to Gujarat by the year-end and southern States such as Tamil Nadu, Karnataka and Telangana by next year.

The fully digital lending company’s co-founder and co-CEO Deepak Aggarwal told businessline in an online interaction that the micro-finance firm, a subsidiary of Moneyboxx Capital Pvt Ltd, is currently operating in Rajasthan, Haryana, Punjab, Madhya Pradesh, Uttar Pradesh, Chhattisgarh and Bihar, where it entered recently.  

Lending features

There are two features of the company, which has 28,000 borrowers from Tier-II and -III cities, offering loans. One, it hires veterinary doctors at its branches and offers their service free to the livestock farmers. This is because it treats the livestock animals as assets.

Moneyboxx co-founder and co-CEO Deepak Aggarwal

Moneyboxx co-founder and co-CEO Deepak Aggarwal

Two, it helps in agroforestry by giving fruit-bearing trees free of cost with support through corporate social responsibility (CSR) initiatives to ensure farmers get additional income

“Any borrower can call up the veterinarian of his branch for any issue, be it injury, cold or cough. So, whatever problems are there in terms of nutrition guidance or vaccination all these services are provided free of cost. It helps in terms of  generating loyalty of the customers and also maintaining assets,” Aggarwal said. 

 All digital 

Moneyboxx, launched in February 2019, offers loans at a flat interest rate of 15-16 per cent and on an average unsecured loans are offered for 28 months.  It provides finance mainly for buffaloes and cows.

Usually, the company starts with offering a loan of ₹1.25-1.5 lakh which can help the farmer to add five animals. After 12-15 months, he is provided ₹2.25-2.5 lakh to bring the number of his cattle to 10. 

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“So, that way he can increase his monthly income from ₹25,000 to ₹50,000,” the co-founder said.  Most of the borrowers have seen a 40-50 per cent rise in their monthly income over the past one-and-a-half years. 

Moneyboxx is a fully digital lender since its inception “The entire process for us is digital. Even the agreement is not signed on a hardcopy. Though the decision-taking is manual,  there’s a platform, where all the credit underwriting happens,” Aggarwal said.

Encouraging investments

The platform is fully digital and in a consumer-facing app the borrower can obviously see his equated monthly instalments in a matter of 15 seconds. “Plus, he can invest in digital gold. That’s our way of telling borrowers that they should save as well,” he said. 

On providing trees free of cost,, he said: “We try to distribute 50 trees that are fruit-bearing free of cost. For this, we tap our CSR  relationships from large corporates. Recently, Dell funded 6,000 such trees,” he said.  

Moneyboxx, which was set up after it acquired Dhanuka Commercial and got the Reserve Bank of India nod, caters to customers who are not taken care of by banks or digital lenders in rural and semi-urban areas.

Moneyboxx’s lending is done after an analysis of how much a farmer can earn from his cattle annually based on the cattle price and transparent price of milk.  

Cover for secured loans

Nearly 30-35 per cent of its loans go to new customers, Aggarwal said, adding that 64 per cent of the lending is for livestock farmers. The rest of the lending goes towards grocery and small businesses such as electrical shops, hardware and clothing merchants. 

“If someone wants an unsecured  loan with a ticket size of say ₹1 lakh or ₹2 lakh, there are hardly any players in India. That’s where Moneyboxx steps in,” the startup’s co-founder said.  

The firm offers secured loans ranging from ₹2 lakh to ₹10 lakh with properties as collateral, he said. 

 Moneyboxx, which claims its credit cost is the lowest in the industry at 1.5 per cent, has ₹338 crore assets under management. This will likely increase to ₹800 crore this fiscal, he said. 

Moneyboxx is open to helping livestock farmers in getting better prices for their milk. It will explore these options when it enters the southern market next, Aggarwal said.