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Moneyboxx Driving Financial Inclusion for the Underserved by Providing Credit for Income Generation

Transformed lives of more than 16,000 borrowers of which 33% were women entrepreneurs and 33% first-time borrowers.

KJ Contributor
Siochana, a rural women from Haryana
Siochana, a rural women from Haryana

How is Moneyboxx enabling its customers to achieve financial inclusion?

Moneyboxx is driving financial inclusion by providing credit for income generation purposes for underserved micro enterprises in Tier-III and below places in India in a cost-effective and transparent manner.

Microfinance borrowers at the bottom of the pyramid, with average loans of less than INR 50k, are adequately served by over 200 MFI lenders. However, such a small amount of finance is inadequate for the borrower to acquire even one head of cattle/livestock or other income-generating asset to bring about a significant change in their income profile. Secured loan of over INR 10 Lacs is also aggressively pursued by Banks and NBFCs.

However, the ‘Missing Middle’ segment (INR 1 Lacs to 10 Lacs) borrower is severely underserved by lenders due to problems in assessment of income and cash flow: lack of adequate business documents, minimal digital footprint, inadequate credit history and lack of good quality collateral. Thus, banks and fintech lenders are unable to address this segment effectively. The Company has been targeting the growth opportunity in INR 1-10 lacs loan segment given the huge credit gap for micro enterprises. As per IFC (World Bank), there was a credit gap of INR 8 trillion in this segment in 2018 which has further increased since then. We at Moneyboxx have been able to successfully design our systems and processes to map the customer journey end-to-end ‘fully digitally’ including income and credit assessment based on deep industry understanding, analytics and automation, thus overcoming peculiar issues in lending to this segment.

The company plans to reach AUM of over INR 400 crores from current AUM of INR 120 crores having proven the business model to service this segment with robust underwriting practices and one of the best asset quality metrics in the industry (Mar’22 GNPA 0.62%) despite the pandemic.

What impact has the company created on its customers so far?

Moneyboxx has so far transformed lives of more than 16,000 borrowers of which 33% were women entrepreneurs and 33% first-time borrowers. The company is enabling multi-fold increase in disposable income of borrowers by providing credit for asset purchase, working capital and income generation purposes, thus creating a sustainable impact beyond just capital. Loans provided by Moneyboxx can lead to doubling of an agri-entrepreneur in three years and bring a transformational change. Moneyboxx is possibly the only NBFC in India which is hiring Vets in branches to help dairy farmers improve milk-yield and cattle health. Moneyboxx came out with its detailed social impact report in just its 3rd year of operation. Thus, it is committed to bring a positive change even beyond financing.

How is Moneyboxx planning to further its impact on the otherwise underserved section of small businesses?

To address the unmet credit needs and keep pace with the increasing customer demand, the Company has been focused on expanding its branch network in Tier-III and beyond places in different states. Commencing operations in February 2019, Moneyboxx currently has around 31 branches spread across five States including Rajasthan, Punjab, Haryana, Madhya Pradesh, and Uttar Pradesh and plans to expand its branch network to 60 by March 2023 and 100 by March 2024. The Company has also expanded its product offering by introducing secured business loans of INR 2 to 7 Lacs. The Company is supported by 20 lenders and has raised three rounds of equity funding in recent years. It recently raised INR 20.77 crores of Equity and plans to raise additional capital to meet its growth plan and create sustainable impact on lives of its borrowers beyond just capital.

Could you highlight any customer success story where Moneyboxx successfully helped uplift a small business?

Moneyboxx has uplifted thousands of small businesses that have been left behind in economic journey owing to the lack of funds. While running a business is tough for any individual, the challenge is even bigger for women. Social stigma, stereotypes, and preconceived notions are the roadblocks that bar them from transforming their dreams into reality.

In the Landeri district of Hisar in Haryana, Siochana, was perplexed as her chances of becoming a successful entrepreneur were getting diminished. She was struggling to make her ends meet but had strong aspiration to start her own milk distribution business. Uncertainty loomed over her future as lack of collateral and no credit history deterred her from availing credit from any sources. With all hopes nearing an end, Siochana's entrepreneurial dream got a new lease of life when MoneyBoxx came forward and understood her situation well. Extending a helping hand, it offered her the first loan of INR 1.5 lakh. With timely repayment, she was able to build a credit history.  She is now successfully running her milk distribution.

Siochana has travelled a long way with support from Moneyboxx but there is still a long way to go. Understanding this and for holistic growth, MoneyBoxx is also providing veterinary doctor services to her at her doorstep to guide her on effective cattle & health management and milk yield and creates awareness on benefits of timely repayment of loan. Her story is a lesson and encouragement for many who can now avail the huge benefits of Moneyboxx to achieve dreams into reality and live a dignified life.

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