Tuesday, June 18, 2024

MSME fintech lender ftcash eyes AUM of ₹1,000 crore in FY24

Ftcash, a non-banking financial company, has announced plans to increase its Asset Under Management (AUM) to ₹1,000 crore by March 2024 from the current AUM of ₹360 crore, a top executive said.

Stating that most of the growth will come from business expansion, primarily in the southern and western markets, Vaibhav Lodha, cofounder, ftcash said, “our expansion is targeted towards west and south India within three categories; Hardware and Electricals, Health and Wellness, as well as Apparels.”

“We believe we have an undue advantage in these segments with our experience and expertise. It has allowed us to keep our NPAs lowest in the market. Our next step is to further penetrate in these regions while also focusing on Tier-2 towns with a hub and spoke model,” he added.

The company’s NPA stands at 3%, as compared to industry standards of 7%, Mr. Lodha said adding that the company was able to ensure that each of its loan was profitable and its unit economics was profitable even during the pandemic.

As a lender to MSMEs, the company said it combines loans with digital payments and has been addressing the huge credit gap in this segment.

“Most of the small business owners in India cannot scale up because of the lack of credit access from formal sources and remain a single-shop business or limited-income business,” said Sanjeev Chandak, co-founder & CEO, ftcash.

“Almost 40-45% of small businesses that we have lent [to] are those who had received business loan for the first time,” he added.

According to Mr. Chandak, most of the company’s growth comes from South India, contributing about 60% of its business.

He said that it was essential to accelerate the flow of credit to MSMEs and bridge the credit gap. The entity has so far raised $15 million in equity and is backed by investors including FMO, Accion and IvyCap Ventures.

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