BSE-listed Moneyboxx Finance Ltd, which finances livestock farmers, plans to expand its footprint in Gujarat by the end of this year and southern states like Tamil Nadu, Karnataka and Telangana by next year.
Deepak Aggarwal, co-founder and co-CEO of a completely digital lending company, told business Line The micro-finance firm, a subsidiary of Moneybox Capital Pvt Ltd, said in an online chat, is currently operating in Rajasthan, Haryana, Punjab, Madhya Pradesh, Uttar Pradesh, Chhattisgarh and Bihar, where it recently entered Is.
The company has two specialties, offering loans to 28,000 borrowers from tier-II and -III cities. One, it employs veterinarians in its branches and provides their services free of cost to cattle farmers. This is because it treats livestock animals as property.
Deepak Agarwal, Co-Founder and Co-CEO, Moneybox
Two, it helps in agroforestry by providing fruit bearing trees free of cost with support through corporate social responsibility (CSR) initiatives to ensure additional income to the farmers.
“Any borrower can call the veterinarian at their branch for any problem, be it injury, cold or cough. So, whatever the problems are in terms of nutrition guidance or vaccination, all these services are provided free of cost. It also helps in generating customer loyalty and retention,” Agarwal said.
Launched in February 2019, Moneybox offers loans at a flat interest rate of 15-16 per cent and unsecured loans are provided for an average tenure of 28 months. It mainly provides finance for buffaloes and cows.
Typically, the company starts with offering a loan of ₹1.25-1.5 lakh which can help a farmer add five animals. After 12-15 months, they are provided ₹2.25-2.5 lakh to bring their number of cattle to 10.
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“So, this way he can increase his monthly income from ₹25,000 to ₹50,000,” said the co-founder. In the last one and a half year, most of the borrowers have seen an increase of 40-50 percent in their monthly income.
Moneybox has been a completely digital lender since its inception. “For us the entire process is digital. Even the hardcopy of the agreement is not signed. Although decision making is manual, there is one platform, where all the credit underwriting takes place,” Agarwal said.
The platform is completely digital and the borrower can clearly see his Equated Monthly Installments within 15 seconds in the consumer-facing app. “Also, he can invest in digital gold. This is our way of telling borrowers that they should also save,” he said.
On providing free trees, he said, “We try to distribute 50 fruit bearing trees for free. For this, we leverage our CSR relationships with large corporates. Recently, Dell funded 6,000 such trees,” he said.
Moneybox, which was set up after acquiring Dhanuka Commercial and receiving Reserve Bank of India approval, serves customers who are not catered to by banks or digital lenders in rural and semi-urban areas.
Moneybox loans are given after analyzing how much a farmer can earn annually from his cattle based on the price of the animal and transparent milk price.
cover for secured loans
About 30-35 per cent of its loans go to new customers, and 64 per cent of loans are to cattle herders, Agarwal said. The remaining lending is given to grocery and small businesses such as electrical shops, hardware and clothing traders.
“If someone wants an unsecured loan with a ticket size of ₹1 lakh or ₹2 lakh, there are hardly any players in India. This is where Moneybox steps in,” said the startup’s co-founder.
He said the company offers secured loans ranging from ₹2 lakh to ₹10 lakh with properties as collateral.
Moneybox, which claims its credit costs are the lowest in the industry at 1.5 per cent, has assets under management worth ₹338 crore. He said this is likely to increase to ₹800 crore this financial year.
Moneybox is ready to help cattle farmers get better prices for their milk. Aggarwal said it will consider these options when it enters the southern market.
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