Demonetisation Impact: Finova Capital targets to disburse loan worth Rs 100 crore to MSMEs in 2017; plans to recruit 500 people in 2 years
Demonetisation has worked as a blessing in disguise for us as we collect 100% repayment through Automated Clearing House (ACH) mode and not through cash, Finova Capital managing director and chief executive officer, Mohit Sahney told Zeebiz.com.
1. Demonetisation has worked as a blessing in disguise for us as we collect 100% repayment through Automated Clearing House (ACH) mode and not through cash, Finova Capital managing director and chief executive officer, Mohit Sahney told Zeebiz.com
2. Finova Capital has disbursed loans worth Rs 20 crore to over 220 customers with ticket size of Rs 9 Lakh in the last one year
3. The company has plans to recruit 500 people in two years time-frame
The government's demonetisation decision has come as a boon to NBFC company like Finova Capital, which has recently announced to target disbursement of loan worth Rs 100 crore to micro, small and medium-sized enterprises (MSMEs) in India in 2017.
In a surprise move to curb corruption, black money and terrorism, prime minister Narendra Modi on November 8 last year announced demonetisation of old currency notes of Rs 500 and Rs 1,000 whereby resulting in massive cash crunch across the country.
“Actually demonetisation has worked as a blessing in disguise for us as we collect 100% repayment through Automated Clearing House (ACH) mode and not through cash.This move, infact, is improving banking habits for us. Earlier we used to do awareness calling to customers to tell them to deposit amount in bank for equated monthly installment (EMI) and now this has improved,” Finova Capital managing director and chief executive officer, Mohit Sahney, told Zeebiz.com.
According to Finova Capital, post demonetisation the cost of borrowing funds from banks has eased.
“NBFC's or micro finance companies collecting in cash are facing issues. Moreover, since liquidity has improved in banking system cost of funds have come down for us," he added.
Jaipur-based Non-banking Financial Company (NBFC) Finova Capital, which focuses on small ticket lending to MSMEs in semi-urban and rural areas, has disbursed loans worth Rs 20 crore to over 220 small scale merchants with the ticket size of Rs 9 Lakh, cited the company in a press release on Tuesday.
It focuses on MSME lending to professional services segment like tea staller,hair dresser, paan wala, small shopkeepers, electrician,plumbers,carpenters, among others by offering minimum loan of Rs 2 lakh and maximum loan of Rs 25 lakh.
Finova Capital offers interest rate on loans in the range of 18% to 20% on reducing basis to its MSME clients.
With its recent announcement of disbursing loans worth Rs 100 crore to MSMEs, the company claims to create about 500 jobs at its clients side in 2017.
“...We will be generating employment at our clients place. This way we expect 1000 loans affecting 4,000 families and employment generation of 500 people. Moreover, in this process we will recruit 75 people as well,” Sahney told Zeebiz.com.
We have plans to recruit 500 people in two years time-frame, Sahney said.
Finova Capital at present has presence in six cities of Rajasthan and it soon plans to expand its operations to other cities of the state.
According to Sahney, Finova Capital will launch its operations in other cities of Rajasthan namely -Chomu, Bassi, Jamwa Ramgarh, Bagru, Dudu, Chaksu, Kuchaman, Jobner, Phulera and Kishangarh- by the second half of 2017.
The company will soon expand its operations to other cities outside Rajasthan in the next year.
“We will expand outside Rajasthan in 2018,” cited Sahney.
Finova Capital was founded by Sahney in 2015 and it provides loans to both urban poor and rural poor to meet their productive requirements.