Over 22% small businesses that availed loans in 2022 run by women: Report

Over 22% of small businesses that availed loans in FY 2022 were run by women, signifying an increase in women business owners, according to the latest annual NeoGrowth Social Impact report.

This report explores the direct positive social impact of NeoGrowth’s business activities on employment generation, empowerment of women entrepreneurs, improvement of credit scores, and making credit accessible to MSMEs. This is the 8th edition of the Report, which covers data for FY 2021-22.

With the knowledge of health and wellness at an all-time high even in the MSME community, 92% of the company’s 20,000+ borrowers availed healthcare coverage in FY 2021-2022. Loan disbursals to women borrowers have grown exponentially at a CAGR of 72% since FY 2015, signifying gender equality.

The company also supported the Government’s financial inclusion agenda, by advancing 60% loans to emerging small businesses that have been in operation for less than or equal to 5 years, 36% to young entrepreneurs below 35 years of age, and 38% loans were small ticket, of less than or equal to INR 10 lakhs.

To delve further into the social impact created, NeoGrowth interviewed 250 customers. Seventy-eight percent of them were first-generation entrepreneurs who traditionally faced barriers to owning and operating businesses due to a severe lack of access to formal finance.

Over 50% of the interviewed customers said they had never been able to access loans before NeoGrowth while 45% showed improvement in credit bureau scores after availing loans from NeoGrowth.

Eighteen percent of the interviewed customers showed an increase in the total number of employees post availing loan, signalling NeoGrowth’s impact in creating indirect employment. Eighty-four percent of interviewed NeoGrowth customers registered an increase in revenue post availing a loan from NeoGrowth, while more than 50% registered a 30% increase in revenue.

In a press statement, 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 $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 witnessed robust year-on-year growth at a 9-year CAGR (2013-2022) of 140% to Rs 1,559 Crore AUM in FY 2021-22, witnessing strong growth despite the unique operating challenges of the pandemic and demonstrating an overall 32-fold increase in the last eight years.