Investor Presentation Q2 - FY20
Sanskrit for “ empowerment ”, niyogin is born out of a deep understanding of the real problems We are niyogin faced by small businesses every day - beginning with collateral free access to credit. We are a passionate team of people who are re-imagining the future of small businesses in India by India’s first end-to-end applying technology, data, analytics and human understanding digital lending platform Our Vision Our vision is to be the country’s best small business centric organization , empowering customers through an ecosystem of products, partnerships, technology and exceptional customer experience. Our Mission Our mission is to give small businesses access to a holistic support system , through cost efficient, innovative technology and a committed network of partners
LARGE Revenues (INR M) UNDERSERVED > 2500 Corporates and Institutions MARKET ~3500 > 750 -2500 Medium Enterprises ~100,000 Small and micro enterprises with turnover less than Small and Micro ~55m < 750 Enterprises ~$10m Microfinance ~207m NA Households Sources : E&Y Evolving Landscape of microfinance in India, 2016 Annual report – MSME India 2017-18
Unaddressed market with extremely attractive Expected Finance Gap in MSME Sector yields INCREASING Total SME Lending Market Formal Credit CREDIT GAP Able/willing to Interest Rate address only Informal Lenders USD USD 24%+ top-end of 600bn 200 bn market The estimated MSME credit gap is Informal USD ~US$300bn growing Credit 150 bn Bulk of market Interest Rate at 7%+ per annum Unaddressed underserved by 16-24% Market USD existing 300 bn financiers Borrowing Total Borrowing in Unmet in Entity Demand Proprietor Demand Name Name Interest Rate Model Banks/NBFCs (Invisible self-limiting to 12-16% Credit) certain niches Source: BCG report, Nov 2018
Our target market - Too big for MFI , Too small for Banks TARGET MARKET= MICRO & SMALL Revenue Segment No. of Units Credit Demand Bank Credit Supply Credit Gap FIRMS (INR m) (mn) (INR tr) (INR tr) (INR tr) < 1.5 m 41.4 4.1 0.9 3.2 Our target market 1.5 m - 3 m 5.6 1.7 0.6 1.1 comprises of micro 3 m - 15 m 4.5 4.8 2.1 2.7 and small enterprises, with turnover <$3m 15 m - 30 m 1.3 2.3 1.0 1.3 and credit gap $105 b 30 m - 180 m 1.8 7.2 3.6 3.6 Total 54.6 20.1 8.2 11.9 Source: Deloitte Analysis, MSME Annual Report, RBI, Industry Reports *data doesn’t capture details of medium enterprises with revenue > INR 750m There is a large funding gap between microfinance and commercial capital that can be filled by a formalized lending process to micro and small enterprises and niyogin aims to address through its innovative business model
“Evangelization” and product customization NIYOGIN Equity Capital due to community presence of finance Co-lending/risk participation partnerships CAPITALISING ON professionals network THE OPPORTUNITY EFFICIENT HYBRID CAPITAL DISTRIBUTION Externalizing the 4 key Empowering components to create an MSMEs ecosystem to efficiently service MSMEs SOLUTIONS & TECHNOLOGY & STRATEGIC ALLIANCES DATA Platformification by providing access to End to end digital paperless journey, integrated services/products beyond credit with India Stack and automated credit decisioning
COMMERCIALISATION ▪ Partners : 1000+ partners onboarded on the platform and engaging with us ▪ Expansion of our distribution across 10 states and 131 locations THE JOURNEY ▪ Disbursals : INR 1bn+ BUILT A STRONG FOUNDATION ▪ Customers : 14k+ customers ✔ Capital raise of $40m We raised equity capital ▪ Acquisition of Moneyfront, a new age wealth management platform ✔ Setting up a strong management and in 2017 & developed a execution team scalable technology & ▪ Partnership with payment provider targeting “kirana” segment ✔ Creating meritocratic culture digital platform for our ▪ Multiple partnerships - Capital, Product, Distribution ✔ Technology, data and digital infrastructure built MSME business in 7 months ✔ Designing our credit, collections and operations processes ✔ Testing our market hypothesis in Maharashtra FY 19 & 20 FY 18
Secured Loans ● Unsecured Loans ● PLATFORM LED MODEL Credit Wealth ● Payments ● Our aim is to be the Treasury ● GST ● Insurance ● “Go to platform” for MSMEs that addresses Financial Services Compliance their business needs Office Automation ● Microsites ● Payroll Services ● Cloud Hosting ● Budgeting / Planning ● SaaS Technology
Foundation of trust Innovative, flexible ● ● and transparency and agile solutions to MSME problems IMPACT Customer Centric Approach niyogin aims to have a Paperless ● Helping NTC ● positive impact towards Approach Customers MSME’s in every sphere possible Financial Environment Empowerment Reach beyond ● Development of ● Tier 2 cities microsites Local support & ● SaaS Offerings ● NRM’s Reaching Enabling Underserved Technology
Moneyfront benefits niyogin benefits with… with… EXPANDING BEYOND CREDIT Expanding into a fast Capital infusion to growing “white space” accelerate growth Exploring the wealth beyond MSME credit management opportunity while Access to physical Value proposition on creating a value-based distribution channel the liability side for MSMEs ecosystem with the customer at the center Access to customer base Tech and Data of 13K+ Sciences infrastructure With this strategic partnership, niyogin (50.1% controlling stake) and Moneyfront will have the solutions, platform and distribution heft to address the credit and the wealth needs of the underserved customers in non-urban locations pan India Moneyfront has obtained regulatory approvals as required
Wealth AUM India (INR .trn) VC/PE Funding India ($ mil) WEALTH TECH MARKET OPPORTUNITY Indian wealth management ecosystem Increasing High Tech Low Penetration Individual Wealth Adoption Rate Levels Source : a)Source: AMFI, RBI, CRISIL Research; Note: Bank deposits includes nationalised banks, private sector banks and foreign banks b)Emerging technologies disrupting the financial sector PWC 2019
MONEYFRONT : DIGITAL WEALTH PLATFORM Similar target SME platform AUM (INR ) Market expansion Large digital wealth 6000 M + management opportunity AUM / Cust (INR ) 2 M+ Combined Access to Marketing partner network
Future US$400m* DIFFERENTIATOR - 1 EFFICIENT CAPITAL A balance sheet light Off Balance Sheet – US$ capital strategy based on 280m* risk participation while enabling cost-effective extension of credit Present Strategic Investor Funds/HNI US$40mn US$120mn* On Balance Sheet Promoter The niyogin capital model enables flexible alignment of institutional risk appetite to appropriate target segments *proposed numbers basis current capital of niyogin
Partner Onboarding Partner Profile ▪ Activity takes less than 5 minutes ▪ Average experience of ~10 years ▪ Ease of onboarding resulting 14x growth in FY19 ▪ Deep understanding of the market DIFFERENTIATOR – 2 ▪ Multi geography granular presence in 100+ locations ▪ Average customer base >100 MSMEs ▪ Risk based origination initiation:- HYBRID ▪ Pre qualifying criteria > invite code sent ▪ Complete partner KYC DISTRIBUTION ▪ Reference Checks ▪ NRM visit > Risk categorization Enables steady growth of customer acquisition and loan origination Partner Acquisition funnel Omni Channel Distribution ▪ Straddles retail, wholesale and direct lending across multiple locations ▪ Onboarded 800+ financial advisor partners ▪ On ground engagement and activation driven by experienced and trained relationship management team Empowering local connects with a digital first approach
Digital Lending (Partner & Omni Channel Loan Origination APP DIFFERENTIATOR – 3 Customer- Web ) Connect TECHNOLOGY India’s first paperless Hunter, Perfios, Karz a, E-sign Multi-Bureau Microservices Aadhar/PAN/ OCR API digital lending platform for MSMEs LOS BRE 26 Applications 72+ APIs LMS CMS Enterprise workflow Lead and Service Open source stack Core Apps Secure Cloud Infrastructure Zone 1 & Zone 2 Open Source UAT & Dev Infra & Database MIS & Analytics IT & InfoSec Policy Social Score Analytics
Pre-Qualification Stage Covers hygiene check, e-KYC & bureau check DIFFERENTIATOR - 4 CREDIT Financial Details ingestion Focus on Banking, GST & ITR Credit and underwriting documents processes are optimally automated to reduce TAT and increase scalability Scorecard based decisioning Look-a-like, Expert, Partner scorecard along with Social & Legal Checks Final Decision Electronic Automated trigger of Post Approval Documentation final decision to the Checks and Disbursal customer & Partner *RCU & FI done by an Disbursal post external agency Agreement e-sign * RCU – Risk containment units & FI – Field Investigation
Platform Customers Retail Partners PLATFORM METRICS Q2’20 vs Q1’20 Wealth AUM (INR M) Activation Rate (%)
AUM (INR M) Disbursals (INR M) CREDIT METRICS Q2’20 vs Q1’20 Ticket Size (INR M) & ROI (%) Asset Quality (%)
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