Godrej Capital Expands its Portfolio, Introducing Unsecured Business Loans for MSMEs in Select Cities – 2023

Godrej Capital Expands its Portfolio, Introducing Unsecured Business Loans for MSMEs in Select Cities – 2023

Credit and financing for MSMEs: According to Godrej Capital, since its start in November 2020, it has amassed a balance sheet totalling Rs 6,500 crores in housing and MSME loans.

To help MSMEs manage their cash flow, the non-banking financial company (NBFC) part of the Godrej Group, Godrej Capital, will now provide unsecured business loans with flexible payback terms. The business said on Thursday that the loan application procedure is digital, with speedy sanction and disbursal, up to 60 months, and an industry-first reward programme on on-time repayments.

MSMEs promote India’s economic progress by stimulating innovation, job creation, and general prosperity. Yet, small businesses usually need help to get quick and flexible financing help. Challenges, including inadequate collateral and seasonal variations in economic cycles, hamper their goals for growth and development. “Godrej Capital is addressing this by providing flexible lending solutions that allow MSMEs to repay their loans in sync with their business cycles,” the statement said.

The loan facility will be available to MSMEs based in 31 markets, including Mumbai, Bengaluru, Delhi-NCR, Pune, Ahmedabad, Surat, Indore, Chennai, Hyderabad, Jaipur, Chandigarh, Alwar, Aurangabad, Baroda, Coimbatore, Jalandhar, Jodhpur, Kanchipuram, Mangalore, Salem, Ludhiana, Mysore, Nagpur, Nashik, Rajkot, Udaipur, Vapi, Vijayawada, Rangareddy, Vishakhapatnam and Thane. 

“We are glad to enhance our product options through unsecured business loans since we are aware of the difficulties MSMEs confront and their crucial contribution to economic growth. Our global reach has grown, and we are currently providing company loans in 31 important areas. The chief executive of Godrej Capital, Manish Shah, stated in a statement, “We are dedicated to being a lender of choice for MSMEs by offering creative, flexible solutions that complement a business owner’s cashflows.

The company previously announced its digital platform Nirmaan in April of this year, intending to offer a variety of services to MSMEs through partnerships with Amazon Global Selling (an e-commerce exports programme), Onsurity (an employee healthcare platform), Zolvit (tax and compliance support for MSMEs), and MSMEx (an advisory forum for MSMEs).   

According to Godrej Capital, since its start in November 2020, it has amassed a balance sheet of over Rs 6,500 crores in housing and MSME loans.

Godrej Capital, a leading lending institution in India, intends to expand its product portfolio by providing unsecured business loans to Micro, Small, and Medium Enterprises (MSMEs) in certain Indian cities.

Since its inception, Godrej Capital has been a critical player in the financial sector, contributing significantly towards India’s economic growth. Godrej Capital, which is a subsidiary of the century-old Godrej Group, provides a variety of products to its clients, such as personal loans, home loans, and automobile loans. Its forward-looking approach, coupled with a deep understanding of the Indian financial ecosystem, has been instrumental in shaping the country’s lending landscape.

The new initiative underscores Godrej Capital’s commitment to supporting MSMEs, which form the backbone of the Indian economy. These businesses contribute substantially to the country’s GDP, generate employment, and play a crucial role in fostering innovation. However, they often need help accessing capital due to insufficient collateral, credit history, or lack of knowledge about lending procedures.

This gap in the market is what Godrej Capital aims to fill with its unsecured business loans, which will provide a financial lifeline to MSMEs without the need for any collateral. These loans are essential in easing financial constraints for these businesses, helping them scale their operations and create more job opportunities.

The service will initially be available in key economic hubs, including Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Pune, and Kolkata. The cities were chosen considering their vast MSME presence and contribution to India’s economic output. Godrej Capital plans to roll out the service in phases, expanding to other cities based on market demand and performance feedback.

To apply for unsecured business loans, MSMEs must have been in operation for a minimum of three years and should show profitability in the most recent financial year. Godrej Capital has made the application process easy and hassle-free, aiming to provide quick approvals and disbursals. The application process is digital, making it convenient for businesses even amid the ongoing COVID-19 pandemic.

The introduction of unsecured business loans is a strategic move by Godrej Capital that aligns with India’s vision to fuel MSME growth. It is a testament to Godrej Capital’s mission to enable financial inclusion and foster economic growth.

The new offering is expected to impact the MSME landscape profoundly, and Godrej Capital’s robust risk assessment and management practices should mitigate the inherent risks associated with unsecured lending.

The initiative signals Godrej Capital’s continued commitment to innovation in financial services, providing much-needed liquidity to MSMEs and supporting them in their journey towards becoming significant contributors to the Indian economy.

Godrej Capital’s unsecured business loan offering is a welcome addition to its portfolio. It promises to bring about a positive change in the MSME sector and mark an important milestone in the company’s journey towards shaping India’s lending landscape.

Observing the consequences of this decision in the upcoming years will be fascinating. If implemented correctly, Godrej Capital’s plan has the potential to act as a template for other loan providers who aspire to strengthen the MSME sector in India.