Mumbai-based non-banking financial company (NBFC) NeoGrowth Credit Pvt Ltd has raised a total of $16 Mn (INR 108 Cr) in a new round of funding from IIFL Wealth Management’s Seed Venture Fund. Its existing investors Omidyar Network, Khosla Impact and Aspada also participated in the round.
Started in 2010 by Dhruv Khaitan and Piyush Khaitan, NeoGrowth Credit is a non-banking financial company, registered with RBI, which provides short-term business loans to Indian merchants for their business needs.
It ideally lends $3K (INR 2 lakh) to $22K (INR 1.5 Cr) to retailers and merchants selling on online marketplaces. These sellers are those who get a majority of their revenues through credit and debit card sales on point-of-sale (PoS) machines. It lends the loan for around 6 to 24 months with no fixed monthly instalments. The lenders can repay the loan in flexible amounts-based on the credit/debit card sales of the merchant.
Managing director of NeoGrowth, Piyush Khaitan said, “We are delighted with the loan repayment performance, our provisions are less than 2%, a number we have maintained consistently month-on-month. We find that small businesses do not get easy access to credit, but once you trust them and lend, they repay the trust in equal measure.”
NeoGrowth had also partnered with Flipkart and other financial companies to launch financial assistance programme for its merchants. Its clientele includes retailers and restaurants for which it provides business financing. NeoGrowth has disbursed $89 Mn (INR 600 Cr) in loans till now and plans to double its loan book every year for the next 4-5 years. The company claims to have given 4,000 loans till now.
Prior to this, NeoGrowth had raised $1.62 Mn (INR10 Cr) from Aspada Investment Company and about $2.7 Mn (INR 17 Cr) from Omidyar Network. It also roped in product and engineering talent from Flipkart and Ola in order to its technology.
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