This fintech startup enables the financial inclusion of women and first-time borrowers


The COVID-19 pandemic has had an interesting impact on women. Research reports suggest that while the work-from-home model has helped some women focus better on their work activities, it has relegated others to take on household responsibilities and made their professional life a second priority, especially if they were married.

Rimmi Zariwala from Mumbai belonged to the second category. Her in-laws, who looked after her daughter while she was busy running her shop little cake store, expected her to take over household chores when the pandemic forced her to close for a while.

But Rimmi wanted to take the time to focus on its construction in line cupcake-making workshop, as well as entering D2C with products such as DIY Hot Chocolate Mix, Cupcake Starter Mix and Mug Cake Mix.

After investing all of her savings in the business, when she asked her family for additional funds, they refused, saying she should take the time to focus on household chores and take care of her daughter. . Exhausted from fighting for her right to work, but not dejected, Rimmi turned to MSME funding platforms to seek funding.

She took a unsecured loan of Rs 30 lakh from an online MSME financing platform and set off headlong into expanding her business.

“If it hadn’t been for the platform, I would have had to give up my business. This funding saved me a lifetime of playing the role women are traditionally supposed to play – a housewife, which is not the way I was raised, ”she says. Your story.

“Strangely enough, my in-laws never asked their own son to quit his job, to ‘father’ our daughter or to take care of them,” she notes.

One of NeoGrowth’s clients

MSME funding platforms have truly become lifelines in a myriad of ways – saving generational businesses from bankruptcy, helping businesswomen assert their own professional and financial freedom, and so much more.

Digital lender Credit NeoGrowth is one of those companies. In fiscal year 2020-21, NeoGrowth granted loans to 1,197 women – or 16.4% of total borrowers – according to its social impact report.

“Another generation of women will have to wait for gender parity, as the impact of the COVID-19 pandemic continues to be felt, and the time needed to close the global gender gap increased by a generation, from 99.5 years to 135.6 years“said NeoGrowth, citing data from the World Economic Forum’s Global Gender Gap Report 2021.

“Neo-Growth removes gender biases from the loan disbursement process, welcomes women entrepreneurs and helps improve their livelihoods, thus playing a vital role in the growth of the community of women entrepreneurs, ”he added.

And it’s not just women. Over the past year, the fintech startup has extended lines of credit to new entrepreneurs, retailers, restaurants, clothing stores, pharmacies, medical clinics and grocery stores too, who have all played an important role in helping people get through the pandemic.

What NeoGrowth does

Founded in 2013 by Dhruv Khaitan and Piyush Khaitan, who together have founded and managed a number of technology companies to serve the SME segment, NeoGrowth Credit is headquartered in Bombay, and present in 24 other cities across the country.

It is a digital lending platform that specifically targets micro, small and medium businesses. It offers a range of secured and unsecured credit products for different sizes of businesses.

Where it is gaining a head start over the banks is Documentation and subscription process.

Not all MSMEs engage in good accounting, and this has historically prevented them from taking advantage of loans. In addition, the lack formal documentation makes organizations financial be wary of engaging with these companies too, mainly due to regulatory requirements.

NeoGrowth solves this problem by simply using the digital payment records of a company, unlike the financial performance statements that most banks insist on. It also helps those who have fewer assets or inadequate credit history access loans, especially if their business is booming and they are able to complete a sufficient number of transactions.

“Our product design is centered on the business model of retailers like digital payments give a good idea of ​​business potential, changes in seasonality and customer footfall in terms of subscription. Furthermore, it excludes any individual factor from the equation and focuses on the commercial potential, in terms of underwriting ”, Arun Nayyar, CEO of NeoGrowth Credit, recount Your story.

The startup claims to have funded over 20,000 clients to date. In fiscal year 2019-2020, he says he loaned Rs 1,450 crore to his clients.

Solve MSME issues

NeoGrowth’s solution for MSMEs solves Three Main problems they face when trying to apply for a loan:

  • Lack of warranty – MSMEs, due to the uncertainty associated with their turnover, do not do the maximum reliable borrowers. Thus, banks often ask for some form of guarantee to insure against any payment default by MSME owners. Only a handful of people who operate in this segment own mortgages, which closes many doors to them.

To solve this problem, NeoGrowth offers unsecured business loans which are based on a host of other factors, including digital transaction records.

  • Insufficient credit history – Most MSMEs are now first-time borrowers, forced to seek financing options due to the pandemic, which means most have no credit history that banks can use to correct their credit repayment behavior. NeoGrowth takes out loans using digital transaction records, which does not require borrowers to have a credit history.
  • Long process – The loans involve an insane amount of paperwork, which can be dissuasive. In addition, even after the process is complete and funds have been allocated, the disbursement can take weeks. Online platforms such as NeoGrowth help MSMEs access this capital quickly. The application process is also digitized to make documentation easier and hassle-free.

“Our mission is to finance small businesses by leveraging the digital ecosystem. Our funding not only helps our clients grow, but also creates a positive impact. More than half of retailers, despite being creditworthy, are denied funding based on traditional underwriting methods, ”says Arun.

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“We help advance sustainable development and fight societal challenges As lack of access to capital, lack of support for entrepreneurship and gender inequalities (when accessing capital via credit).

Of the 20,000 clients of its platform, NeoGrowth says more than 5,000 come from level II cities and 15,000 from level I cities.

The startup raised Rs 500 crore in equity financing, and double the amount of debt. Omidyar Network, Aspada Investment Company, Khosla Impact, IIFL Seed Ventures Fund, among others, are its investors. In FY20, he recorded income of Rs 333 crore.

Its competitors include Work, Indifi technologies, Capital float, Aye Finance, and FlexiPrêts, among many others.

Going forward, the startup said is looking to expand to Level III areas and add more usable locations to its roster.

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Edited by Saheli Sen Gupta

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