Moneyboxx Finance Ltd, a BSE-listed NBFC, which provides small-ticket business loans to micro and small enterprises, is looking to disburse loans to the tune of ₹400 crore during the current fiscal. The NBFC’s AUM (assets under management), which stands at around ₹120 crore as on March 31, 2022, is likely to touch an AUM of ₹400 crore by March 2023.

According to Mayur Modi, Co-Founder, Moneyboxx, there is tremendous growth opportunity in the ₹1 lakh to ₹10 lakh loan segment given the huge credit gap for micro-enterprises and the presence of very few focused players in the segment. The company plans to strengthen its distribution in some of the existing markets and also diversify into newer geographies to scale up its footprint.

“There is a huge demand for credit in the small business loan category but not many people are willing to finance this segment as underwriting is one of the biggest challenges. You need to get on the ground and understand the segment. We have created a strong underwriting and distribution model,” Modi told BusinessLine.

The NBFC, which commenced operation in February 2019, primarily operates in tier-II, tier-III and tier-IV towns. It currently has around 30 branches spread across five States including Rajasthan, Punjab, Haryana, Madhya Pradesh, and Uttar Pradesh. It plans to double its branch network by opening 30 more branches during the current year taking it up to 60 by March 2023.

“Nearly 50-60 per cent of the new branches will be in some of our existing States while around 30-40 per cent will be in newer geographies in States such as Gujarat and Chattisgarh,” he said.

Moneyboxx focuses on disbursing small-ticket business loans to individual borrowers such as livestock, kirana, traders and micro-manufacturers among others.

Covid impact

The NBFC saw a decline in collection efficiency to nearly 80-85 per cent in April 2020 due to Covid-induced slowdown and lockdown across the country. However, things started improving post June-July 2020 and its collection efficiency improved to close to 95-96 per cent by June 2021. It expects its collection efficiency to improve to around 98 per cent during the current fiscal.

“Unlike the MFI segment where the borrowers’ income levels are very low, here most customers have dual income and higher income level and hence their ability to absorb shock is better,” he said.   

The company, which raised close to ₹15 crore of equity in December 2021, is looking to raise around ₹100 crore during the current fiscal. Of this, the first tranche of ₹25 crore is expected to come in by May this year, while the second tranche will come in during the third quarter.

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