NeoGrowth Raises $20 Mn From DFC To Boost Lending to SMEs This funding commitment is for five years with a two-year moratorium on principal payment and will be utilised for onward lending to SME customers as per ECB guidelines
By Soumya Duggal •
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NeoGrowth, an Indian NBFC lender with a focus on Micro, Small & Medium Enterprises (MSMEs), has secured funding from the United States International Development Finance Corporation (DFC) for $20 million via the External Commercial Borrowing (ECB) route.
This funding commitment is for five years with a two-year moratorium on principal payment and will be utilised for onward lending to SME customers as per ECB guidelines, said a statement.
Arun Nayyar, Whole-time Director and CEO, said, "NeoGrowth is funding India's small businesses by leveraging the digital ecosystem and this backing from DFC will help us drive that mission further while also creating a positive impact on SMEs. We will be using these funds to further extend credit to our customers to propel their business growth," said Arun Nayyar, whole-time director and CEO, NeoGrowth.
DFC is America's development finance institution and partners with the private sector to finance solutions to the most critical challenges facing the developing world today. It invests across sectors including energy, healthcare, critical infrastructure and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. It has a sizeable investment portfolio in India, including in health, agriculture, renewable energy, climate solutions, and other sectors.
"DFC's investment in NeoGrowth will increase access to capital for small businesses in India. NeoGrowth's digital, flexible model enables it to reach more small businesses, promoting financial inclusion, economic growth, and development across the country," said James Polan, DFC's vice president of the Office of Development Credit.
With close to a decade in SME lending, NeoGrowth claims to have engaged with over 1 lac customers and disbursed over $1 billion in loans across 25 locations in India. The company considers its digital payments-based lending, modular product suite, analytics-based underwriting, and flexible repayment options to be key to enabling credit access to SMEs.
