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

The fashion, lifestyle and F&B sectors increased credit demand for women-led SMEs from July to October.

NeoGrowth, India’s leading NBFC with a focus on lending to Micro, Small and Medium Enterprises (MSMEs), today unveiled a survey that revealed credit demand from women-led MSMEs by the end of Celebration 2022 compared to the pre-pandemic celebration season of July-October 2019.

This doubling in the credit needs of women-led small businesses is due to strong consumer demand following the economic recovery and reduced spending during the festive season over the past two years.

According to NeoGrowth data, the top 3 cities registering the highest credit demand from women-led SMEs in 2022 are Bangalore, Hyderabad and Mumbai.

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Among female borrowers, the fashion and lifestyle, F&B, FMCG and retail sectors saw higher credit applications than other sectors as the festive period ended in October this year.

Recently, according to data released by the National Payments Corporation of India (NPCI), UPI transaction volume grew by over 73% 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, Managing Director & CEO, NeoGrowth, said, “Over the past few years, India has witnessed a significant shift towards various digital payment methods. We believe that the ease and affordability of transactions through digital payments increased the demand for this year’s festival. After two years of covid-19 disruption, the festive season was very strong for the industry. Backed by this booming consumer demand across India, we have documented that MSME women in particular are seeking more credit in business sectors.

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In order to analyze the festive credit demand among SMEs, growth was calculated based on the comparison of credit applications received from more than 30,000 SMEs during the pre-pandemic festive months of 2019 and 2022, i.e. July to October.

Similar to 2019, metro cities continued to lead MSME festive credit demand in 2022. According to NeoGrowth data, the top 3 cities that showed outstanding credit demand in 2022 are Bengaluru, Hyderabad and Mumbai. Other cities with strong credit demand this festive season include Vijayawada, Ahmedabad and Kolkata.

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Overall credit demand from SMEs in the FMCG and retail sector showed a 2-fold increase in the festive months of 2022 compared to the same period in 2019. There was a 70 percent increase in credit demand from consumer durables and electronics retailers. In addition, the fashion and lifestyle sector witnessed a nearly 40% increase in MSME credit demand this year compared to 2019.

NeoGrowth caters to the credit needs of MSMEs across 70+ sectors across 25 Indian cities and has disbursed over $1 billion in loans and touched 1+ lives.

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