In what could be seen as an example of India’s agri and allied business doing well despite harsh economic impact of Covid-19, Moneyboxx Finance that is focused on lending to the dairy sector has reported high repayments even during the government-mandated loan moratorium between April and Septembet.
“ In the April- June quarter when the loan repayment ratio of NBFCs had normally dwindled to 30-40 percent, we maintained a hefty collection ratio of around 90 percent which has further improved in the second quarter,” Mayur Modi, Co-CEO, Moneyboxx Finance told indoasiancommodites.com.
With 60 percent of customers from the livestock and dairy businesses, collection has not been an issue after the company put fresh loans on hold in the first quarter, he added.
Formed in 2018, Moneyboxx Finance operates in four states – Rajasthan, Madhya Pradesh, Haryana and Punjab – and has a loan book of close to Rs 50 crore. It mainly offers unsecured credit in the Rs 50,000 – Rs 300,000 ticket size and its major customers are dairy entrepreneurs as well as small scale local trading and manufacturing businesses.
“Our focus on Tier-2 and Tier-3 markets and heavy exposure to the livestock and dairy sectors has been based on our preliminary analysis that despite having steady growth patterns, they have been under-served by NBFCs. The comfortable collection during the moratorium period has further emboldened our conviction that this is a formidable business,” Modi said.
Moneyboxx has branches in Bhatinda (Punjab), Hisar (Haryana), Dewas and Ujjain (Madhya Pradesh), all which are considered to be major dairy markets in the country.
Modi also emphasised that in order to consolidate its existing base of dairy sector customers, the company has begun offering advisory services especially pertaining to their full-fledged inclusion in the mainstream financial system.
“Cash transaction is the main mode of their business transaction. We are trying to educate them about the benefits of using formal banking channels which could build a better credit portfolio for them. Gradually we will add more advisory services to our portfolio for this section of customers,” Modi informed.
Moneyboxx Finance plans to add 11 new units in the four states where it is currently present.
“By the end of the current fiscal, we will have a total of 22 branches in these four states and with the rural economy on the track, we are expecting our loan book to rise to over Rs 80 crore,” Modi said.
Maharastra, Gujarat, UP and Bihar are the other states where Moneyboxx would want to move in.
“In a medium term perspective, while our exposure to livestock and dairy sector may come down a bit, there would be an expanded portfolio of offerings for agriculture and allied businesses. The segments like farm equipment are emerging as very promising businesses for the future,” he pointed out.