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NeoGrowth raises $20 million from United States International Development Finance Corporation

This funding commitment to the non-banking financial corporation is for five years with a two-year moratorium on principal payment t

NeoGrowth raises $20 million from United States International Development Finance Corporation

Vinita Bhatia

POSTED ON November 01, 2022 5:14 PM

NeoGrowth, a non-banking financial corporation (NBFC) lender with a focus on micro, small and medium enterprises (MSMEs) has secured funding from the United States International Development Finance Corporation (USIDFC) for $20 million via the External Commercial Borrowing (ECB) route. 

USIDFC, a development finance institution in America, partners with the private sector to finance solutions to critical challenges facing the developing world. It invests in energy, healthcare, critical infrastructure, and technology sectors. 

USIDFC also provides small businesses and women entrepreneurs financing to create jobs in emerging markets. It has an extensive investment portfolio in India, including in the health, agriculture, renewable energy and climate solutions sectors. 

Arun Nayyar, whole-time director and chief executive officer at NeoGrowth, said, “NeoGrowth is funding India’s small businesses by leveraging the digital ecosystem and this backing from USIDFC will help us drive that mission further while also creating a positive impact on SMEs. We will use these funds to extend credit to our customers further to propel their business growth.”

James Polan, USIDFC’s vice president of the Office of Development Credit, said, “USIDFC’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.” 

This funding commitment is for five years with a two-year moratorium on principal payment. It will be utilised for onward lending to SME customers per European Central Bank guidelines.

According to NeoGrowth's MSME Insight Report 2022, March 2022 saw MSME credit demand from non-metros reverting to pre-COVID levels whereas metros lagged. 75 per cent of these borrowers upgraded their pre-pandemic loans opted for a higher principal loan amount. 

With close to a decade in SME lending, NeoGrowth has engaged with over one lakh customers and disbursed over $1 billion in loans across 25 locations in India. Its digital payments-based lending, modular product suite, analytics-based underwriting, and flexible repayment options help enable credit access to SMEs for their various business needs.   

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