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Dvara KGFS, a non-banking finance company focusesd on financial inclusion, has set a fund-raising target of ₹600 crore under debt route for FY21, to meet its disbursement plans for the year and fuel its growth and expansion needs.
The announcement was made during a virtual press conference organised by the company on Thursday to highlight the digital banking facilities provided to people in the remote villages during the lockdown.
Dvara KGFS said it has facilitated gross cash withdrawal transactions of more than ₹7 crore through its 300-odd branches since April 19 through an Aadhar-Enabled Payment System (AEPS).
“We are happy that we were able to provide AEPS service to around 45,000 villagers and facilitate a gross cash withdrawal of more than ₹7 crore through our 300-odd branches in such a short span of time,” said Joby CO, CEO of Dvara KGFS.
Fund-raising plans
Of the total fundraising through debt route, ₹100-200 crore is planned from the overseas market, while the remaining amount will be raised from domestic debt sources.
“At the moment we are comfortable with our liquidity. In the first phase of moratorium, we have been able to get moratorium benefit upwards of 75 per cent from our own lenders. Therefore, we could successfully take care of our future liquidity requirements,” said Joby.
Although the company does not have any equity fund-raising plans for FY21, it is in active conversation with existing equity investors as well as others to meet any contingency arising out of the Covid-19 pandemic.
Dvara KGFS has raised a total of $22 million through equity in the previous year. The latest round of equity funding came from Nordic Microfinance Initiative (NMI) in September 2019. The other equity investors in the company include Dvara Trust, Stakeboat Capital, LeapFrog Investment, and Accion.
Business impact
On the business impact, Dvara KGFS CEO said the company would typically do ₹250-300 crore of business in the first quarter, which was lost this year due the pandemic and resultant lock down.
Dvara KGFS’ average monthly collection in the pre-Covid period stood around ₹80 crore. Currently, the NBFC is able to collect 55 per cent of this amount.
“We are providing moratorium to all our customers till August 31 as per the RBI circular. However, about 55 per cent of our customers are currently making the EMI repayments,” said Joby, adding, “if these customers are unable to make their EMI repayments in July or August, they will still qualify for the moratorium”.
Expansion plans
Dvara has also postponed its current year expansion plans. “It was proposed to open 65 branches in FY21, but now have reduced the target to 23 branches. The company will have a relook at expansion plans post the moratorium period and Covid-19 situation in the country,” said Joby.
The new branches will come up in Odisha (12), Chhattisgarh (6), Tamil Nadu (3) and Karnataka (2).
Dvara KGFS currently has 297 branches spread across 48 districts in six States and serves more than one million customers.
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