Godrej Capital Eyes Rs 12,000 Crore Loan Book This Financial Year On MSME Push

The loan book for the Godrej Group's financial services division, Godrej Capital, is expected to reach Rs 12,000 crore this fiscal year, up from Rs 5,500 crore in the just-ended fiscal as quoted by PTI.

The business, one of the newest NBFCs, didn't start operating until the end of 2020 as a housing finance company, largely to support the group's real estate arm. Later, the company developed an NBFC vertical with a focus on SMEs and MSMEs.

Out of the Rs. 5,500 crore total loan book, Rs. 4,000 crore is allocated to the house loan sector, of which more than 50% are customers of Godrej Properties. The remaining Rs. 4,000 crore is allocated to the 1,000 MSME customers who are small enterprises. Manish Shah, the company's managing director and chief executive, stated on Monday that there are no bad loans in any of the two business sectors and that the MSME book turned profitable in the third quarter of this year while the home loan division did so for the entire previous fiscal year.

He added that the first tranche of the Rs 1,200 crore capital injection by the promoters this fiscal year will occur this quarter. The Godrej group invested Rs 1,500 crore in equity capital when they established the holding company. With a loan book of Rs. 5,500 crore, we ended FY23. This fiscal year, we want to increase this to Rs 12,000 crore. Given that we intend to triple our presence this year, more over 7,000 crore rupees of that sum should come from the MSME/SME vertical. According to Shah, the remaining payments should be made to the house loan vertical.

The business also intends to expand its geographic reach by nearly three times and its MSME customer base by 10,000 this fiscal year.
By the third year of operations, the management had set a goal of surpassing the Rs 10,000-crore loan book, which Shah expressed his strong confidence in exceeding this year.

He predicted that the MSME/SME book will expand to Rs 30,000 crore within the next three years and that the total loan book would reach Rs 50,000 crore by FY29, at which point they would also contemplate going public. Shah announced the introduction of Nirman, a specially curated digital platform that will give MSMEs/SMEs a chance to scale up their operations, as part of the aggressive growth plan.

To expand its potential market reach, streamline legal and compliance requirements, improve employee health and welfare, and offer business coaching to small enterprises, the company first teamed with Amazon Global Selling, Onsurity, Zolvit, and MSMEx.
According to Shah, this is not intended to have immediate or medium-term commercial advantages, and small enterprises can use the services at no expense. By using their platform, a business can avoid paying the Amazon registration charge of up to Rs 10,000 over the course of six months.

The company said in a statement that the MSMEs in the nation currently face difficulties including limited access to the market and the capacity to expand beyond their regional reach; ignorance of the requirements for legal and regulatory compliance; limited access to technology; difficulty in hiring and retaining a skilled workforce; and restricted access to credit. By offering services in the categories of Growing the Business, Simplifying Business Operations, and Transformation through Upskilling, the platform seeks to address these issues.