Announcement from Mr. D. K. Khaitan (Chairman) and Mr. P. K. Khaitan (Managing Director): Arun Nayyar appointed as Chief Executive Officer, NeoGrowth

Mr. Arun Nayyar6 years ago we founded NeoGrowth, and it has been a remarkable journey for us. We have built a substantial business around a unique business model, with differentiated features that others are still trying to emulate. Over these years, we have created our proprietary technology, processes and product features. As the book grew, we added requisite governance, management talent and attracted high quality investors & debt providers. All of this has positioned us very well for the next stage of our trajectory of rapid growth.

As NeoGrowth steps into the next stage of growth, we need to augment the leadership team with a person having in-depth knowledge & experience of leading a large NBFC. We have therefore decided to bring in a person who understands the nuances of a new wave lending business & has built a successful NBFC from scratch as Chief Executive Officer.

We are happy to inform you all that we have appointed Arun Nayyar as “Chief Executive Officer” and he has joined us today. Arun has over 20 years of working experience & successfully managed a variety of assignments in this space.

Arun joins us from Edelweiss Retail Finance Ltd where he had been the ‘Chief Executive Officer & Business Head – SME Lending’. He had the overall responsibility of setting up the SME lending business within the retail finance vertical. He joined Edelweiss group around 7 years back and was the first employee of the SME Lending business. Over these years, he successfully built, from scratch, a differentiated and robust SME portfolio, spread across 100 locations.

Prior to Edelweiss, Arun was with Citibank for 8 years in Commercial Banking, and Risk Head for the consumer & commercial portfolio. He had joined Citibank as a Relationship Manager and was elevated as Regional Business head in two years. Later he became the Risk Head and was responsible for portfolios including micro-finance and the unsecured retail assets portfolio.

He has also worked for 2 years at CRISIL early on in his career. Arun is a Chartered Accountant and also worked for AF Ferguson & Co as Audit trainee for three years.

We both look forward to working closely with Arun, and the team, in building NeoGrowth into a much larger and significant presence in the NBFC landscape in India. We will continue to have a direct and significant role in this journey. D. K. will continue as Chairman, and P. K. as Managing Director of NeoGrowth.

All of us at NeoGrowth extend a very warm welcome to Arun.

D. K. Khaitan                              P. K. Khaitan

Chairman                                     Managing Director

NeoGrowth aims to cross Rs 7000 Cr in AUM in the next 5 years – Excerpts from MD & CEO Piyush Khaitan’s interview with BW Businessworld.

BW-logoBW Businessworld in one of India’s prominent business magazines. Founded in 1981, the magazine specialises in analysis of businesses, stock market, finance and economy news.

What Was The Rationale Behind Launching NeoGrowth? What Market Gaps Are You Trying To Fill?

Prior to NeoGrowth, we had a digital payments processing business – Venture Infotek, which we later sold to a European multinational in 2010. It is during these years, where working closely with retailers, we realized their pain points in terms of accessing finance. More than 50% of these retailers, though credit-worthy, were denied finance based on traditional underwriting methods.

It is this gap that we aim to bridge with NeoGrowth. Our tech & touch model along with our Customer Centric business philosophy are the key attributes which have helped us emerge as market leaders.

How has your experience been with providing unsecured loans to small merchants? What’s your delinquency rate?

We understood early on the importance of understanding consumer behaviour. We took that as a guiding light for our product & technology development and that is evident from our product features like the daily repayment facility instead of a monthly EMI.  Also, NeoGrowth focusses heavily on customer delight initiatives as they are our true brand ambassadors. We have a healthy renewal rate of around 70%. Our default rates are around 3%.

In short, what’s your growth plan for the next five years? 

Having pioneered the Digital Lending in India, we are operating as per our Strategy of Deeper, Wider & Newer. We have offices in top 21 cities of the country, where we envision the best growth for acceptance of Digital payments. We will continue to expand into these markets and keep improvising and will come up with better solutions to help the SME segment.

Also, it is extremely important that the loans we give, cause a positive social impact, helping in job creation, women empowerment, development of SME’s, and we measure our success by the Social impact caused by us.

In the next 5 years we aim to cross Rs 7000 Cr in AUM; in other words, build a billion dollar balance sheet.

To read the full interview, click here.

Neogrowth - Aahar Mag Ad - 9-7-18 - Final New - 3

NeoGrowth’s advertisement was recently published in AHAR Connect (July edition) – A publication of Indian Hotel & Restaurant Association.

NeoGrowth changes the way SMEs access credit, a report by Business India.

Business-India-LogoThe technology & data driven approach of NeoGrowth to help SMEs with much needed financial assistance, was recently covered by Business India magazine in their June 2018 issue.

Business India is one of the strongest brand names in magazine publishing industry in India. Founded in 1978, the magazine, over the years has helped in creating awareness and generate public opinion on critical issues and choices in business, industry, economy and society.

While covering the Digital Impact caused in the Indian SME segment, NeoGrowth’ s innovative business model,best described in the words of Mr. Dhruv Khaitan (DK), the Charmian of NeoGrowth, stood out. “We have created a business model that operates at the convergence of three ecosystems – lending, urban retail and digital payments, on a platform of technology & innovation” said DK.

Founded in 2012, by Dhruv Khaitan (DK) & Piyush Khaitan (PK), NeoGrowth now operates across 21 locations in India, serving the SMEs of these regions with quick, timely and hassle free access to finance. NeoGrowth loans come with unique features like the daily repayment which is focused on customer centricity. This feature helps merchants to plan their cash flows better, especially taking into slow & off seasons. “These loans are processed much quicker than a typical loan, giving merchants fast access to cash when needed ” said PK.

Graph

The exponential journey of NeoGrowth witnessed in the Digital lending landscape garnered significant interest. NeoGrowth, in this short stint, scaled its disbursements from INR 9 Crore (2013) to INR 1358 Crore (2018). During the same period the revenue of the firm skyrocketed from INR 2Crore (2013) to INR 243 Crore (2018).

Positive Social Impact, a key element of NeoGrowth’s DNA was exemplified by the customer experiences shared by NeoGrowth customers, many of whom were first time borrowers. According to Vabez Sarosh Wankadia of Sams Studio, who have been providing specialized hair & beauty treatments to clients in the western suburbs of Mumbai,
“As a woman entrepreneur, I was able to dream big, because NeoGrowth helped me to have a new perspective.”

With the government’s thrust on digital payments in India, the under-served SME segment becomes an even bigger opportunity for Digital lenders, as the acceptance of digital payments is growing amongst large number of business owners.

 Click on the link to read complete article :https://goo.gl/7hFmW9

NeoGrowth listed amongst 10 Best Emerging Fintech Startups

The positive Social Impact ushered in by NeoGrowth through its lending facility to the SME retail segment was recognized by Insight Success magazine, which listed NeoGrowth amongst the 10 Best Emerging Fintech Startups of 2018.

The 10 Best Emerging Fintech Startups in 2018

Insight Success has been an arch that is sustaining Entrepreneurs quench their requirements for technology and business updates that are currently ruling the business world. The Magazine is one of its kind, which molds itself according to the choice of its readers every single month! Their aim is to share with the readers the information of their particular industry, as well the critical information they require and demand to grow their businesses.

cc

The financial assistance provided by NeoGrowth, to the under-served SME retail segment in form of quick, timely & hassle -free loans, based on digital payments, using technology and business model innovation , was a pioneering concept that stood out during the research done by Insight success magazine related to the Digital lending Space.

However the most appreciated fact related to NeoGrowth was the positive social impact caused by NeoGrowth, in terms of boosting entrepreneurship and job creation.

Creating a Positive Social Impact , is at the heart of the NeoGrowth’s business strategy, which is geared towards improving the financial lives of small and medium business merchants across India, more than 50% of whom are creditworthy but until now have been excluded from accessing loans based on traditional underwriting methods.

NeoGrowth caters to this under-served market by adopting an innovative approach and validating the creditworthiness of the business. This is done by looking at current business performance and stability. Till date over 15,000 business merchants have been helped by NeoGrowth to grow their businesses.

The unique tech & touch model of NeoGrowth, augmented by the in-house technology platform and smart analytics of the digital spends data ensure that NeoGrowth offers the best products and services in the market.

NeoGrowth gets a rating upgrade

CARE Ratings has upgraded the rating of NeoGrowth Credit’s Non-convertible Debentures rated by them from CARE BBB to CARE BBB+, signifying a stable outlook for the company.

rating

CARE Ratings provides the entire spectrum of credit rating that helps corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Its rating and grading service offerings leverage its domain and analytical expertise backed by methodologies congruent with the international best practices.

The rating revision of NeoGrowth, factors in the sizeable capital infusion of Rs.300 crore in the company which has significantly improved the capitalization levels of the firm. The rating also factors in the extensive experience of the promoters and the management team in the industry and the comfortable liquidity profile. “We look forward to further improving our ratings over the next few years so as to access larger & lower cost debt. This is core to our growth strategy and will have a critical role to play in shaping our pricing strategy going forward” said PK Khaitan, Managing Director, NeoGrowth.

The unique business model of NeoGrowth, providing loans to merchants across India, based on digital spends happening on the Point of Sale (POS) machine at their outlets, has helped the firm expand to 21 cities across the country. Harnessing its tech & touch model, NeoGrowth has brought merchants from various industry segments under the umbrella of
Digital Lending.

NeoGrowth is making steadfast developments in technology and product domain to serve the customers better. Convenient & easy to use onboarding tools like Sales App equipped with e-sign feature have helped NeoGrowth make the process from Loan application to disbursal, smooth & efficient.

NeoGrowth aims at leading the fast changing Digital lending environment,which has thrown open new opportunities in terms of utilizing alternate data sources like GST ( Goods & Service Tax) returns of merchants, digital spends etc as to arrive at underwriting decisions.

NeoGrowth awarded for Outstanding Financial Services

The 7th Global Economic Summit, which concluded on 24th February 2018, was an ideal platform to assess the state of play with respect to Indian Micro, Small & Medium Enterprises (MSMEs) in the global value chain. The 3-day Summit included panel sessions, case presentations, exhibition, B2B meetings, felicitation of outstanding business organizations and knowledge workshops.

“In India, MSME sector has recorded an annual growth of more than 10% over the past few years. It is crucial to rationalize and simplify taxes for MSMEs as they account for almost 99% of companies filing tax returns in India,” said Gen. (Dr.) V. K. Singh (Retd.), Minister of State, Ministry of External Affairs, Government of India at the 7th Global Economic Summit on ‘Global Value Chains: Accelerating MSME Growth, Development and Sustainability’ .

NeoGrowth was honoured with an award for Outstanding Financial Services. Mr. Yogesh Nakhwa, VP- Business Excellence & Operations, represented NeoGrowth for receiving the award.

NeoGrowth awarded at GESA key factor which made NeoGrowth stand out for this honour was the positive impact that its loans caused on the society. This Social Impact that NeoGrowth loans cause in terms of job creation, women empowerment and business expansion for SME’s was deeply appreciated at the GES summit.

The Government of India’s initiatives for MSME’s, focusing on two key areas – enabling MSMEs to make more high-value products and ensuring they have timely and adequate access to credit and funds were the key highlights during the summit. NeoGrowth has been working actively since past 5 years towards addressing this major challenge of providing quick & easy access to credit to this under-served SME segment. Even today, 50% of SME retailers do not have access to formal funding and NeoGrowth, through its technology enabled processing is addressing this need by providing loans to the merchants against their future digital sales, thereby unlocking credit that is tailored to the merchants business requirement and helping the merchant grow his business.

The 3-day Global Economic Summit received an overwhelming response from more than 100 business and government delegates from 30 countries and 280 delegates from India.

The Summit was jointly organized by World Trade Centre Mumbai and All India Association of Industries(AIAI).

Impact of Union Budget 2018-19 on MSME Sector

The Honourable Finance Minister presented the Union Budget 2018-2019 in Parliament on 1st February. This budget was guided by a mission to strengthen the agriculture, rural development,health, education, employment, MSME and infrastructure sectors of the Indian economy.The special emphasis on the MSME sector gives a huge boost to the players present in the industry, especially the Digital Lending companies. NeoGrowth, being a prominent Digital Lending Player in India, kept a close eye on the budget announcements.

INR 3794 crore was allocated in the budget for giving credit support to the MSME. This demonstrates that the government appreciates the need to provide adequate finance to MSME, complementing the efforts of the industry.

BudgetThe budget spoke of the massive formalization of the businesses of MSMEs, especially after demonetization and introduction of GST. This in turn is generating an enormous financial information database of MSME businesses and finances. This big data base will be used for improving financing of MSME capital requirement, including working capital.

This very well implies that the government is recognising the flow based lending via GSTN database as an alternate method of lending. This in turn would help Digital lenders determine the credit worthiness accurately and provide capital needs to untapped industry segments.

Online loan sanctioning facility for MSMEs will be revamped for prompt decision making by lenders. This is directly aligned with our efforts to provide loans to merchants within minimal turnaround time and for financial inclusion of the underserved market.

As per the budget announcement , the Government will soon announce measures for
effectively addressing non-performing assets and stressed accounts of MSMEs. Both Banks and NBFCs are currently going through the stress of bad loans. This is a very welcome move from the government to address the credit quality in this sector. We are hoping that such measures are announced soon.
The speech also clearly mentions focus on Fintech for growth of MSMEs. A group in the Ministry of Finance is examining the policy and institutional development measures needed for creating right environment for Fintech companies to grow in India. This is the first time when government has given clear emphasis of the Fintech sector via a Budget and recognises our efforts in the MSME industry.

For Fintech and NBFCs, working closely with Mudra will be a big theme. The proposed rejig of MUDRA refinancing criteria is another big plus. Currently MUDRA is refinancing MFIs, NBFCs and Banks who lend under the scheme. This however comes with a cap on the final rate that can be charged, for NBFCs at 6% above the refinance rate offered by MUDRA. However, the small-ticket and shorter tenure of loans on digital platforms entail higher operating cost than typical NBFC business. Thus, a rejig in this sense would really help the Fintech industry, especially the Digital Lending players.

The budget talked about extending the benefit of a reduced corporate tax rate of 25% to companies who have reported turnover up to INR 250 crore in the financial year 2016-17. We welcome this move as this will encompass most of the Digital Lending Players in India.

The Government also plans to list many steps for building a robust alternative investment regime in the country via Venture Capital Funds and Angel Investors. The government though its budget plans to roll out a taxation regime designed for the special nature of the Venture Capital Funds and the Angel Investors. This boost will certainly help the Indian
grown Venture Capital Funds and Angel Investors, thereby opening possibilities for them in growing and investing in Indian Fintech sector.

The overall tone and direction of the Union Budget presented  was extremely positive and it recognised the role of MSME sector and related Fintech/Digital Lending Players as growth driver of the economy for the coming year of 2018-2019.

NeoGrowth raises Rs. 300 Crores in a round led by Leapfrog investments

Having pioneered the Digital lending phenomenon in India, NeoGrowth further boosted its vision of lending to small and medium businesses by raising Rs.300 crores of equity capital. LeapFrog Investments, the largest dedicated equity investor in financial services and healthcare for emerging consumers, led the round, with existing investors Aspada Investment Company and Quona Capital, through Accion Frontier Inclusion Fund also participating.Rs in Hand

NeoGrowth’s unique approach towards lending to retailers is based on analysing and underwriting digital payments data generated from daily sales. This approach revolutionises small business lending, making it possible for merchants who are unable to secure loans from traditional banks, to access much needed finance, a major requirement for the underserved SME market in India.

“India’s digital lending space is experiencing massive growth, providing unprecedented  opportunity for NeoGrowth to apply its pioneering technology approach to enable loans for a rapidly expanding SME merchant segment,” said Piyush Khaitan, Managing Director,
NeoGrowth Credit Pvt. Ltd. NeoGrowth plans to utilize the new capital to grow its loan book, continue to reach deeper into India’slargest cities and to further expand into other urban areas.

Michael Fernandes, Partner at LeapFrog, who led the investment, joins NeoGrowth’s Board of Directors. “India is at an inflexion point as the rise of cashless financial services, harnessing big data, transforms the lives of millions of emerging consumers,” he commented.

With the current wave of digitization in India and the increase in adoption of digital payments, the market for digital lending to SME’s is destined to expand further. “NeoGrowth’s emphasis on analytics-driven underwriting and technology-enabled re-payment are the strategic ingredients that have helped the firm expand its customer base across India,” said Aspada Co-Founder Thomas Hyland.” According to a 2017 survey of NeoGrowth’s customers, 50% did not have access to formal funding prior to their first NeoGrowth loan and 82% stated that their business had benefited financially from being able to access a loan from NeoGrowth.

Ganesh Rengaswamy, Co-Founder and Partner, Quona Capital – which manages the Accion Frontier Inclusion Fund – commented, “Merchants today are seeking smart access to finance in a simple and hassle-free manner. NeoGrowth is pioneering digitization of SME financing, which is one of the best responses to this need.”

NeoGrowth featured in this year’s Top 50 emerging market fintech firms as selected by KPMG and H2 Ventures and also amongst Top 10 Social Impact companies by Forbes. NeoGrowth used Avendus Capital as exclusive financial advisors and Khaitan & Co. (KCO) as the legal counsel during the fundraise process.

 

NeoGrowth’s Donation Drive

NeoGrowth recently partnered with Goonj and participated in their used “Clothes Donation Drive.”

Goonj, is a non-prot organization, founded by Mr. Anshu Gupta, winner of the Ramon Magsaysay Award (2015). Goonj is turning the underutilized material of cities into a resource for rural development. It is about turning the age old tradition of using old material as charity and using it for a regular & dignied living. Starting with 67 clothes in 1999,Goonj now deals with over 3000 tonnes of material every year in 22 states across India.

NeoGrowth teamNeoGrowth contributed to the Rahat initiative of Goonj, by organizing used Clothes Donation Drive across its Mumbai, Delhi, Chennai, Hyderabad, Bangalore, Pune ofces. Donation boxes were placed at the respective ofces and a two week communication program was executed to build awareness for the drive.

 

NeoGrowth employees showed immense enthusiasm for the drive and came out in large numbers to contribute their used clothes for the initiative. Across these six ofces, 9 boxes of clothes were collected and were later handed over personally by NeoGrowth team to the Goonj Ofce.

Goonj team

These clothes will be used by Goonj as part of its Rahat initiative, through which they provide need based immediate relief material to help in rehabilitation of natural/human disaster hit areas across the country.

NeoGrowth’ s quest of catalysing the societal impact is further enhanced by initiatives like these, which reiterate the belief that a positive change can be brought about in society both by the loans that we give to SMEs to help them grow their business and also by partnering and encouraging initiatives like this used Clothes Donation Drive, which help us give back to the society in a humble manner.

NeoGrowth recognized as ‘Top 50 emerging fintech firms’ around the world

KPMG and H2 Ventures released their fourth annual ‘Fintech 100’ report which compiles a list of the year’s best fintech innovators from around the world.

The ‘Fintech 100’ is divided into two sub-lists: (1) the ‘Top 50’ established fintech firms around the globe, which are ranked based on innovation, capital raising activity, size and country; and (2) the ‘Emerging 50’ firms, which are newer companies that are at the forefront of innovative technologies and practices and often pursuing new business models.

NeoGrowth Credit Pvt. Ltd. featured amongst the Top 50 Emerging Fintech Firms around the world.

                                                          1 fintech-payment

The selection of companies in the Fintech 100 was a result of extensive global research and analysis based on data and the core five factors noted below:

1. Total capital raised
2. Rate of capital raising
3. Geographic diversity
4. Sectorial diversity
5. X-factor: degree of product, service and business model innovation (a subjective measure that was applied only with respect to companies appearing on the Emerging list)

Some Key Highlights from the report:-

• The Fintech100 included a broad range of fintech companies from 29 different countries, with Companies from Korea, Mexico and Poland featuring for the first time.
• Within the ‘Emerging 50’, over US$600M has being raised in the last year and just over   US$1B has been raised in total (since founding).
• The number of lending and payments related businesses continues to stand out in this year’s Fintech 100, with 32 and 21 companies respectively.
• Vast majority of companies in the Fintech 100 are using data, analytics and artificial     intelligence to fuel their business models.

These factors further embolden NeoGrowth’s outlook towards digital lending, best described in words by Mr. Piyush Khaitan (PK), Managing Director (NeoGrowth). The digital lending space is bigger than what we imagined…this means a very large market opportunity. NeoGrowth is looking at leading this space in India.”

NeoGrowth has been continuing on its journey of helping SME’s grow their business by providing them business loans at quick turnaround time, guided by strong data and analytical inputs and technology enabled repayment mechanism.

Over last year NeoGrowth expanded its geographical presence to 21 cities across India, thereby bringing the SME’s of these regions closer to gaining financial assistance for achieving their business growth.

(* ‘Fintech 100’ by KPMG & H2Ventures)