How NeoGrowth started offering MSME loans
1 min read . Updated: 11 Apr 2019, 02:54 AM ISTWe realized that there is a huge credit gap we can bridge by leveraging our learnings in digital payments and transactions, says NeoGrowth MD Piyush Khaitan
NeoGrowth is a technology-enabled lending business providing loans to under-served micro, small and medium enterprises (MSMEs) on the basis of their digital spends through point-of-sale machines.
My brother, Dhruv Khaitan, and I founded a digital payments processing firm, Venture Infotek, in the mid-1990s. It soon became India’s largest transaction processing firm and operated merchant acquiring, card processing, loyalty programmes and government benefit programmes on behalf of Indian banks and large retailers. It is during these years that we realized retailers’ pain points in terms of accessing finance.
More than half of these retailers, though creditworthy, were denied finance on the basis of traditional underwriting methods. That was the click moment for us. We realized that there is a huge credit gap we can bridge by leveraging our learnings in digital payments and transactions. We divested Venture Infotek in 2010 and founded NeoGrowth in 2011-12 to provide MSME retailers easy access to credit. NeoGrowth has pioneered an innovative lending model in India, which operates at the convergence of three ecosystems—lending, urban retail, and digital payments.
Our product design is centred around the business model of the retailers, as card swipes give a good sense of the business potential, seasonality changes, and customer footfalls for underwriting.
Another differentiating factor is that it has a daily recovery model and is digitally driven. Our tech-and-touch model, along with a customer-centric philosophy, has helped us emerge as market leaders.
NeoGrowth has focused on creating a positive social impact by lending to first-gen entrepreneurs, assisting women entrepreneurs, and enabling our customers to create jobs and improve credit scores through our loans.
Piyush Khaitan is managing director and co-founder of NeoGrowth Credit.