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

The Fashion, Lifestyle and F&B segments led demand for loans to women-led SMEs from July to October

NeoGrowth, India’s leading micro, small and medium enterprise (MSME) lending NBFC, today unveiled a survey showing that loan demand from women-led SMEs has doubled by the end of the festive months of 2022 compared to the pre-pandemic festive season July – October 2019.

This two-fold increase in loan requests from women-led small businesses is driven by strong consumer demand following the economic recovery and subdued holiday spending over the past two years.

According to data from NeoGrowth, the top 3 cities to see the highest demand for loans from women-led SMEs in 2022 are Bengaluru, Hyderabad and Mumbai.

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Among women borrowers, the Fashion & Lifestyle, F&B, FMCG and Retail segments witnessed higher loan demand compared to other sectors as the festive season ended in October this year.

According to data released by the National Payments Corporation of India (NPCI), UPI transaction volume increased by over 73% year-on-year in the festive month of October 2022, indicating increased use of digital payments by consumers for their spending. Indians made a total of 7.3 billion UPI transactions this month.

Mr. Arun Nayyar, Director & CEO, NeoGrowth said, “Over the last few years, India has witnessed a remarkable shift towards various digital payment modes. We believe the convenience and affordability of transactions through digital payments has fueled festive demand this year. The holiday season proved strong enough for the industry after two years of disruption due to the COVID-19 disease. Backed by this growing consumer demand across India, we have registered that women in SMEs in particular have sought more credit across various business segments.

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For the purpose of the festive SME loan demand analysis, growth was calculated by comparing loan applications from more than 30,000 SMEs during the pre-pandemic holiday months of 2019 and 2022, i.e. July to October.

Similar to 2019, also in 2022 metro cities led in overall holiday demand for loans from SMEs. According to data from NeoGrowth, the top 3 cities that have shown huge demand for loans in 2022 are Bengaluru, Hyderabad and Mumbai. Other cities showing strong loan demand this festive season include Vijaywada, Ahmedabad and Kolkata.

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Overall loan demand from MSMEs in the FMCG and retail segment showed a 2-fold increase in the festive months of 2022 compared to the same period in 2019. Loan demand from durable goods and electronics retailers grew by ~70%. In addition, the Fashion and Lifestyle segment saw an almost 40% increase in loan demand from MSMEs this year compared to 2019.

Serving the credit needs of SMEs across 70+ segments across 25 cities in India, NeoGrowth has disbursed over USD 1 billion in loans and touched 1 lac+ lives.

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