According to the International Finance Corporation (IFC), there is a $300 billion financing gap for formal, women-owned small companies around the world, and more than 70% of these businesses have insufficient or no access to financial services.
In India, there are now 1.23 crore MSMEs with women at the helm, up from 2.15 lakh ten years ago. However, they have a $158 billion funding imbalance and primarily rely on unofficial sources.
The chance to increase the number of women working in the banking and financial services industry in India is being presented by a new era of financial services driven by technology integration and governmental policies.
These innovations are supported by cutting-edge credit products like fully integrated banking technology, women correspondents, and the extension of credit support to women-led businesses, including digital-first channels, all of which have the potential to provide new and enhanced value propositions for female customers. These actions will aid in removing historical hurdles that have prevented women from obtaining official credit.
There is already so much bias against women, and it can only be eased by providing some kind of assistance. Enterprises like NeoGrowth are demonstrating that women can successfully operate businesses. NeoGrowth is a modern digital lender that specialises in lending to Micro, Small, and Medium Sized Businesses (MSMEs).
Neogrowth is a Non-Deposit Taking Non-Banking Financial Company (NBFC-ND-SI) of Systemically Importance that provides a wide range of solutions suited to the changing requirements of small businesses.
NeoGrowth believes that firms in the twenty-first century should be run by capable and responsible women borrowers. Their loan disbursal to companies where a woman was a co-applicant for the loan as well as companies run by women who are either sole proprietors, partners, or directors is increasing tremendously.
The company's portfolio saw a significant increase in the number of female entrepreneurs, going from 61 in FY 2014–15 to 4,671 in FY 2021–22. This shows how dedicated the business is to advancing gender equality and giving female entrepreneurs opportunity to advance their businesses.
According to the most recent annual NeoGrowth Social Impact report, women owned over 22% of the small firms that received loans in FY 2022, indicating an increase in female business owners.
This paper looks at how NeoGrowth's commercial actions have a direct beneficial social impact on creating jobs, empowering women company owners, raising credit scores, and making loans available to MSMEs. The Report's eighth edition, which includes information for FY 2021–2022, is now available.
92 percent of the company's 20,000+ borrowers took advantage of healthcare coverage in FY 2021–2022, with awareness of health and wellness at an all-time high, especially among the MSME community. Since FY 2015, loan disbursals to female borrowers have increased significantly at a CAGR of 72%, indicating gender equality.
By advancing 60% of loans to new small businesses that have been operating for less than less than or equal to 5 years, 36% of loans to young entrepreneurs under 35, and 38% of small-ticket loans of less than or equal to INR 10 lakhs, the company also supported the government's financial inclusion agenda.
NeoGrowth called into question 250 customers to learn more about the social impact that was made. 78% of them were first-generation company owners, who have historically had difficulty starting and running their own companies because of a severe lack of access to institutional financing. More than half of the clients surveyed claimed that they had never been able to acquire loans before working with NeoGrowth, and 45 percent reported an increase in their credit scores as a result of doing so.
Following loan approval, 18% of the clients interviewed indicated a rise in total employees, demonstrating NeoGrowth's contribution to indirect employment creation. Eighty-four percent of NeoGrowth customers who were surveyed reported more revenue after taking out a loan from the company; more than fifty percent reported a 30 percent higher revenue.
Arun Nayyar, Whole Time Director & CEO of NeoGrowth, said, “MSMEs are the drivers of India’s economic and social development, and are poised to play a critical role in catapulting India’s GDP to realise its USD 5 Trillion dream. It is our responsibility to be a larger catalyst and trusted partner in MSMEs’ digital transformation journey and business growth story by facilitating lending to meet the evolving business needs of small and medium businesses across India.”
NeoGrowth's loan book has had excellent year-over-year growth at a 9-year CAGR (2013-2022) of 140 percent to INR 1,559 Crore AUM in FY 2021–22, exhibiting an overall 32-fold expansion in the last 8 years despite the unique operating hurdles of the pandemic. With its "digital led" business strategy, the company can serve a variety of clients in Tier-I and Tier-II locations, which accounted for around 28% of all expenditures in FY 2022. NeoGrowth currently provides MSMEs with support across 25 locations and 70+ industries.
Inclusive of Gender in Lending
NeoGrowth is a firm believer in actively assisting female business owners. In FY 2021–22, NeoGrowth provided loans to 4671 women, or 15.83 percent of all borrowers.
