Investor Presentation Q3 - FY20 1
Sanskrit for “ empowerment ”, niyogin is born out of a deep understanding of the real We are niyogin problems 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 India’s first end-to-end businesses in India by 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 2
LARGE Revenues (INR M) UNDERSERVED > 2500 Corporates and Institutions MARKET ~3500 > 750 -2500 ~100,000 Medium Enterprises Small and micro enterprises with Small and Micro turnover less than < 750 ~55m Enterprises ~$10m Microfinance ~207m NA Households Sources : E&Y Evolving Landscape of microfinance in India, 2016 Annual report – MSME India 2017-18 3
Unaddressed market with extremely attractive Expected Finance Gap in MSME Sector yields INCREASING Total SME Lending Market Formal Credit CREDIT GAP Able/willing Interest Rate to address Informal Lenders USD USD 24%+ only top-end 600bn 200 bn of market The estimated MSME credit gap is Informal USD Credit ~US$300bn growing 150 bn Bulk of market Interest Rate Unaddressed at 7%+ per annum 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 self- Banks/NBFCs (Invisible limiting to 12-16% Credit) certain niches Source: BCG report, Nov 2018 4
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 5
“Evangelization” and product NIYOGIN Equity Capital customization due to community presence Co-lending/risk participation partnerships CAPITALISING ON of finance professionals network THE OPPORTUNITY EFFICIENT HYBRID CAPITAL DISTRIBUTION Externalizing the 4 key Empowering components to create MSMEs an ecosystem to efficiently service TECHNOLOGY & SOLUTIONS & MSMEs DATA STRATEGIC ALLIANCES Platformification by providing access to End to end digital paperless journey, services/products beyond credit integrated with India Stack and automated credit decisioning 6
COMMERCIALISATION ▪ Partners : 1400+ partners onboarded on the platform and engaging with us ▪ Expansion of our distribution across 10 states and 131 locations THE JOURNEY ▪ Disbursals : INR 1.5bn+ BUILT A STRONG FOUNDATION ▪ Platform Customers : 15k+ We raised equity Capital raise of $40m ▪ Acquisition of Moneyfront, a new age wealth management capital in 2017 & Setting up a strong management and platform execution team developed a scalable ▪ Partnership with payment provider targeting “kirana” technology & digital Creating meritocratic culture segment platform for our MSME Technology, data and digital infrastructure ▪ Multiple partnerships - Capital, Product, Distribution built in 7 months business Designing our credit, collections and operations processes Testing our market hypothesis in Maharashtra 7 FY 19 & 20 FY 18
Secured Loans ● PLATFORM LED Unsecured Loans ● MODEL Credit Wealth ● Payments ● Our aim is to be the Treasury ● GST ● “Go to platform” for Insurance ● MSMEs that addresses their Compliance Financial SME’s Services business needs Office Automation ● Microsites ● Payroll Services ● Cloud Hosting ● Budgeting / Planning ● SaaS Technology 8
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 9
Moneyfront benefits niyogin benefits with… with… EXPANDING BEYOND CREDIT Expanding into a fast Capital infusion to growing “white Exploring the wealth accelerate growth space” beyond MSME management credit opportunity while Access to physical Value proposition on creating a value- distribution channel the liability side for based ecosystem with MSMEs 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 10
Wealth AUM India (INR .trn) VC/PE Funding India ($ mil) CAGR : MF : 25% , Bank Deposits : 9% 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 11 b)Emerging technologies disrupting the financial sector PWC 2019
MONEYFRONT : DIGITAL WEALTH PLATFORM Similar target SME platform AUM (INR ) Market expansion Large digital wealth 7500 M + management opportunity AUM / Cust (INR ) 2 M+ Combined Access to Marketing partner 12 network
Future US$400m* DIFFERENTIATOR - 1 EFFICIENT CAPITAL A balance sheet light capital strategy based Off Balance Sheet – US$ 280m* on 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 13 *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 14 Empowering local connects with a digital first approach
Digital Lending (Partner & Omni Channel Loan Origination APP Customer- Web ) DIFFERENTIATOR – 3 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 15
Pre-Qualification Stage Covers hygiene check, e-KYC & DIFFERENTIATOR - 4 bureau check CREDIT Financial Details ingestion Credit and Focus on Banking, GST & ITR 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 16 * RCU – Risk containment units & FI – Field Investigation
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