A Unique Business Endeavor Catering to the Financial Needs of the Underserved
MONEYBOXX FINANCE LIMITED
By giving credit to borrowers who are underserved, Moneyboxx Finance Limited acts as a catalyst in the financial environment, transforming lives and promoting financial inclusion. It is BSE-listed NBFC catering to the unmet credit needs of microenterprises in Tier III and below places in India. It was established in 2019 with the goal of promoting financial inclusion and offering tech-enabled, cost-efficient, and transparent financing to underserved micro enterprises.
With financial inclusion at its core, it provides unsecured and secured business loans from INR 70,000 to 7,00,000 with tenure ranging from 12 to 60 months to meet the credit needs of microentrepreneurs in essential sectors (livestock, Kirana, retail traders, and micro-manufacturers). They are transforming lives of underserved borrowers by enabling multifold increase in their income over loan tenure by granting credit for the purchase of assets, working capital, and income creation. Headquartered in Gurgaon, Moneyboxx has successfully scalped up its presence to 50 branches across six states (Rajasthan, Madya Pradesh, Haryana, Punjab, Uttar Pradesh, and Chhattisgarh) as of Nov’22.
Mayur Modi-Co-Founder Co-Founder
In addition to directly offering loans for income generation to underserved borrowers, Moneyboxx also offers local talent job opportunities, contributing to the inclusive growth of the local economy. Additionally, as part of their impact programmes, they employ full-time veterinarians in branches to counsel livestock borrowers on cattle health, nutrition, and breed improvement to enhance milk yield. The firm is also undertaking sustainable farming efforts, which will significantly increase borrowers’ agricultural revenue.
These activities include the free distribution and upkeep of fruit-bearing plants to dairy/agri borrowers through CSR tie-ups and internal contributions. The agro-forestry initiative’s effects will be significant and long-lasting: The improvement of borrower income, the protection of the environment through soil conservation and improved air quality, and the sustainability of food sources.
SERVING THE UNDERSERVED
Rural India, which has a population of 65% and a GDP contribution of 47%, is vital to inclusive growth, however it received only 9% of the bank credit as of March 2021. With more than 225 lenders offering microfinance loans (average ticket size of less than INR 50,000) microfinance borrowers have adequate access to credit. Though such a small sum of loan is insufficient for the borrower to buy even 1 nice herd of cattle or another revenue producing asset, let alone change their income profile significantly.
While access to credit for the microfinance borrowers at the bottom of the pyramid has improved with outstanding credit of INR 2.87 trillion as of March 2022, there is a significant credit gap for the missing middle segment (loans between INR 50k and INR 10 Lakhs), which had outstanding credit of INR 1.02 trillion as of March 21. Mayur Modi and Deepak Aggarwal co-founded Moneyboxx Finance to address the unmet credit demands of the “missing middle” of borrowers in light of this vast credit gap and its significant potential for financial impact Moneyboxx is driving financial inclusion by addressing unmet credit needs of the missing middle segment (INR 1 – 10 Lakhs).
With cumulative disbursements of over INR 350 crores up to Nov’22, Moneyboxx has so far transformed lives of more than 22,000 borrowers of which 35% were first-time borrowers, while around 45% were women entrepreneurs.
Moneyboxx is committed to creating sustainable social impact by bringing transformational change in the income of its borrowers. By extending loans for income generation opportunities, they are enabling a multi-fold rise in the borrowers’ disposable income and creating an impact that goes beyond capital. A typical livestock borrower is able to double their income and livestock count within three years with the help of Moneyboxx business loans.
The Key Differentiating Factor – Tech-driven Scalable Business Model
Moneyboxx has successfully been able to service this MFI+segment through its unique ‘phygital’ model, which leverages technology for scalability and efficiency while ensuring strong customer connections through on-ground presence, resulting in better underwriting and collection efficiency. There are several different competitive advantages.
With proven business model in impact financing, the Moneyboxx has not only won over the trust of 22 lending partners, a few NBFCs have also started colending partnerships with them, and few banks are considering a large partnership model with the company. Given the soundness of its business model despite the epidemic, Moneyboxx is also regarded as a benchmark for NBFCs in its segment.
Moneyboxx uses a relationship officer-assisted sourcing methodology and uses a fully digital workflow from loan application to payout through collections. It has implemented robust cloud-based, integrated loan management platform for quick, cost-effective operation scaling.
01. Sourcing: An entirely digital collection of data: Using a direct-to-customer sourcing approach, Loan Relationship Officers of Moneyboxx generate direct customer leads and do not use any DSA or third-party loan sourcing models, putting emphasis on relationship-based business rather than product-based approaches and efficient credit underwriting. Field officers collect all key data points digitally using a mobile and advance the proposal for credit evaluation.
02. Robust credit evaluation & underwriting: While credit underwriting in the segment is challenging given lack of adequate business documents, Moneyboxx has proven and strong underwriting model which uses non-traditional and non-financial alternative data sources and proprietary sector-specific scorecards and advanced analytics. It has one of lowest credit costs in its segment with less than 1% GNPA despite pandemic.
03. Customer onboarding, disbursements & collection: Moneyboxx employs a fully digital strategy, including loan documentation that is e-signed, to make the onboarding process quick, simple, and effective. All payments are made electronically and through financial channels. In addition, Moneyboxx is possibly the only NBFC in India
which is hiring Vet doctors on a full-time basis in its branches to help its livestock borrowers in improving milk yield, improve cattle breeds through artificial insemination and take better care of cattle health.
Moneyboxx’s Take on Innovation
Innovation is an integral part of the DNA here. In order to better understand its consumers, the company uses technology for everything from data capture and credit scoring through approval, disbursement, collection, reporting, and analytics. This is known as a “phygital” business model. Although Moneyboxx uses a relationship officer-aided methodology for sourcing, the entire process, from onboarding to loan documentation to
disbursement and collections, is conducted entirely online.
Moneyboxx has taken a fully digital approach to ensure easy and transparent access to credit, from customer onboarding through loan documentation to disbursements and collections. It has been able to profit from cost-effective digitised procedures, analytics, and decision-making because of significant investments in IT infrastructure for cloud-based integrated loan management software. Moneyboxx is also known as a cuttingedge, technologically advanced financial organisation that promotes economic growth by providing transparent finance to neglected micro businesses.
Key Milestones achieved by Moneyboxx
With loan disbursements of more than INR 350 crores up until November 2022, the company has successfully expanded to 50 branches across six states in just 3.5 years after it began operations in February 2019. The number of active customers multiplied, rising from 2,885 in March 2020 to 6,789 on March 21 and 11,468 on March 22 to reach about 19,000 as of November 2022.
The company’s AUM increased from INR 29.9 crore in March 2020 to INR 63.25 crore on March 21 and then to INR 121 crore on March 22. This growth occurred at a 101% CAGR from FY20 to FY22. At the end of November 2022, AUM was INR 215 crores. Employee count increased from 127 as of Mar’20 to 228 as of Mar’21, 313 as of Mar’22, and is now at 600 as of Nov’22, in keeping with business growth and regional development.
Due to increased branch productivity and the opening of new branches, the company’s total income more than doubled from INR 11 crore in FY21 to INR 23.3 crore in FY22. Income increased by 95.4% from the prior year to INR 18.6 crore in H1 FY23. Moneyboxx has so far transformed the lives of more than 22,000 borrowers, of which 45% were women entrepreneurs and 35% were first-time borrowers.
The company is enabling a multi-fold increase in the disposable income of borrowers by providing credit for asset purchase, working capital and income generation purposes, thus creating a sustainable impact beyond just capital. Its livestock borrowers are able to double their income and livestock count in three years. To assist dairy farmers in increasing milk production and the well-being of their cattle, Moneyboxx may be the only NBFC in India to employ veterinarians at its branches. In just its third year of business, Moneyboxx published a thorough social impact study. It aims to impact 1 million lives over the next five years.
Key Principles of Moneyboxx
Financial inclusion is at the heart of the business! Their vision is to be the ‘Lender of Choice’ for micro-entrepreneurs in India. To support their objective and common vision, they just began an organization-wide campaign called “One Team, One Dream.” Their most valuable resource is the human capital, and the HR, Learning & OD team plays a critical role in finding the right individuals, offering training, and ensuring that the team is working toward the common goal and meeting stakeholder expectations.
Their work atmosphere encourages open communication and a collaborative approach, and trust, justice, and openness are the organization’s three guiding principles. Given the robust expansion goals, the Company provides one of the greatest compensation packages in the sector, including benefits, incentives, and ESOPs. Additionally, there are several career prospects inside the Company at various levels. One of their most precious assets is human capital, and they continually invest in the team.
Accomplishments on the Way
Based on its noteworthy initiatives for financial inclusion, women empowerment, and beyond-lending projects, including fulltime impact officers/vets at branches and agro-forestry initiatives, Moneyboxx Finance has been nominated by the Michael & Susan Dell Foundation for a two-year study. In just its third year of business, Moneyboxx published a thorough social impact study.
With the loan activities, we promote financial inclusion: About 45% of Moneyboxx clients that borrow money are women, whereas 35% of consumers are NTC (New to Credit) borrowers. Moneyboxx has been conferred with prestigious awards for its commendable work in impact financing and digital initiatives. 22 institutional lenders, including the country’s leading bank State Bank of India, IDFC First, and DCB Bank, have posed confidence in Moneyboxx’s business model, underwriting capabilities and contribution to impact financing.
Future Outlook
The Company aims to impact over 1 million lives over the next five years. As part of its Business Plan, the Company plans to expand its branch network from 30 as of Mar’22 to 60 by Mar’23 and 105 by Mar’24. From an AUM of INR 121 crore as of Mar’22, it targets to reach an AUM of INR 350 cores by Mar’23 and INR 2,000 crores by Mar’25.
In the past three and a half years, the company has effectively scaled up operations and raised equity of INR 70 crore and debt of over INR 300 crore. It has a target of raising INR 130 crore in equity in FY24 for which it is in talks with institutional investors and impact funds.
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