Women entrepreneurs register a two-fold increase in credit demand this festive season: NeoGrowth survey

Fashion, lifestyle, and F&B segments led credit demand from July to October for women-led MSMEs

NeoGrowth, India’s leading NBFC, which focuses on lending to small and medium enterprises (MSMEs), today released a study which shows that loan demand from women-led MSMEs has increased double by the end of the 2022 holiday month compared to the July – October 2019 holiday period before the pandemic.

This two-fold rise in loan demand for women-led small businesses is driven by strong consumer demand after two years of economic recovery and festive spending past

According to NeoGrowth data, the top 3 cities that have registered the highest loan demand of women-led MSMEs by 2022 are Bengaluru, Hyderabad and Mumbai.

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Among women borrowers, the Fashion & Lifestyle, F&B, FMCG & Retail segments witnessed higher loan applications compared to other sectors, after the October holidays this year.

Recently as per the data released by National Payments Corporation of India (NPCI), the volume of UPI transactions increased by over 73% yoy in October 2022, indicating that consumers are using the digital payments for their expenses. Indians hit 7.3 billion in UPI transactions this month.

Mr. Arun Nayyar, Director and CEO of NeoGrowth said, “Over the last few years, India has seen a remarkable transformation in the way digital payments are made. We believe that the ease and efficiency of transactions through digital payments has driven the demand for this year’s festival. The festive season proved to be a strong one for the industry, after two years of disruption due to Covid-19. Backed by this pan-India consumer demand, we registered that women MSMEs, in particular, sought more credit in the business sector.

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For the analysis of festive loan demand among MSMEs, growth was done by comparing the loan inquiries received from more than 30,000 MSMEs during the festive month of 2019 and 2022, i.e. July-October.

As in 2019, metro cities continue to lead MSME loan demand in 2022. According to NeoGrowth data, the top 3 cities that showed loan demand be in 2022 will be Bengaluru, Hyderabad and Mumbai. Other cities showing strong credit demand this festive season include Vijaywada, Ahmedabad and Kolkata.

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Overall credit demand from MSMEs in the FMCG and Retail sectors showed a 2X growth in the festive month of 2022 compared to the same period in 2019. There was ~ 70% increase in credit claims from Consumer Durables and Electronics retailers. In addition, the Fashion & Lifestyle segment witnessed a 40% increase in MSME loan applications this year, compared to 2019.

NeoGrowth serves the needs of MSMEs in 70+ segments across 25 cities in India and has disbursed 1 billion dollars in loans and touched 1 lac+ lives.

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