TruCap Finance plans to focus on cluster lending to tap small and medium enterprises in tier-II and -III cities. The company has also tied up with HDFC Bank, DCB, Central Bank of India and Shivalik Small Finance Bank for co-lending to small businesses.  

Rohan Juneja, Managing Director & CEO of TruCap, told businessline that the company has opened branches were there are lending opportunity to a cluster of local businesses. For instance, he said a branch opened in north of Ahmedabad to service the thriving MSME business of tile and ceramics which has been very successful.

Within the cluster, TruCap has focused on retail cash and carry businesses such as chemists, kirana stores, cloth traders, shoe retailers, hardware stores and plumbers.

Going forward, the company plans to focus on Maharashtra, Madhya Pradesh, Gujarat, Rajasthan, Haryana, Delhi, NCR and Goa. It plans to increase its branches in smaller towns to 125 from 96 this fiscal.

“We have minimised the risk of default by adopting phygital model as it will have better control on collection and recovery from the borrowers both in the secured and unsecured product,” he said.

Interest rate

TurCap also cumulatively disbursed ₹1,250 crore till date to small businesses. The interest rate on unsecured term loan ranges between 16 per cent and 25 per cent while the same for secured loan varies between 12 per cent and 21 per cent depending on risk profile of the borrower and loan amount.

Last fiscal, the NBFC had disbursed about ₹1,012 crore and wants to increase it by 20 per cent in this fiscal. In the co-lending business, the banks chip in 80 per cent of the corpus and 20 per cent is contributed by the NBFC.

“It is a world of collaboration and not competition with banks. Since we have a physical presence in small towns, we have the expertise to identify the right customers and banks are more than willing to partner with genuine companies,” he said.