Sugmya Finance Empowers Over 60K Households Across India

Priyanka Tanwer
Priyanka Tanwer Jan 30 2023 - 4 min read
Sugmya Finance Empowers Over 60K Households Across India
Sugmya Finance is a tech-enabled and cashless model-led financing company that provides micro loans to entrepreneurs to boost their business backed by a robust client selection mechanism and a special emphasis on overall inclusive growth.

Sugmya Finance, a non-banking finance company, offers three financial services to help customers grow their ventures. It provides MSME loans, micro loans and consumer durable loans and has empowered more than 60K households through its network presence of 80 branches in 40 districts across nine states.

Vikas Singh, Co-Founder and Chief Executive Officer, Sugmya Finance spoke with Opportunity India and shared the challenges and experience he witnessed in running the Sugmya Finance.   

Sugmya Finance was established in April 2020 during the pandemic. “In my 16 year-career in the finance industry, I did a lot of research about the causes and effects of non-performing assets (NPAs). At Sugmya, we have tried to specifically design our products based on key takeaways and lessons learned from the unprecedented impact of events like the Andhra crisis, demonitization and Covid-19 on the Indian economy.”

He said Sugmya Finance is a tech-enabled and cashless model that provides unique offerings backed by a robust client selection mechanism, operational expenses and a special emphasis on overall inclusive growth.

He said that the company provide collateral free loans to the underserved MSMEs in tier-4 and semi-urban locations. “We have a range of products starting from 50k to 250k based on the requirements of MSMEs,” he added.

Speaking about the challenges he said that everyone has contributed immensely in our journey since inception. Be it our investors, lenders or dedicated staff working tirelessly to efficiently scale our business and ensure 100 per cent cashless collection.

“We did face challenges during the initial stages of implementing our cashless process. It was a new experience both for our clients as well as team, but once they embarked on this journey they were able to make a smooth transition,” Singh told Opportunity India.

“This is a phygital model where we serve our clients through tech-backed offerings with a personal touch. Before opening a branch, we do a feasibility survey. Once we finalise the branch, our business team sources customers who are provided income generating loans as per our product and policies and in accordance with clients' needs. Sugmya Finance offers three major financial services to help customers grow their ventures: MSME loans, micro loans and consumer durable loans. We deliver a diversified range of end-to-end financial services to men and women from semi-urban, urban and rural locations in India. Underlining the role of microfinance, the loan options provided by the company help promoting self-employment, and enable women to make their own financial decisions,” he said.  

He further added that Sugmya is at the forefront of digitisation in rural India, actively contributing towards a technology-led innovative financial ecosystem.

When asked about how the company help entrepreneurs from rural India, he said Sugmya gives collateral-free loans to entrepreneurs from rural India for income generating activities. “Our loans help entrepreneurs to start and scale their business. This includes small businesses involving dairy products, animal husbandry, garments and small scale general stores,” he added.

He said that the institution has touched the lives of as many as 44,000 women across India since its inception. Since most of these borrowers cannot access funds from other financial institutions, taking financial services from Sugmya enhances their chance of income generation. Having supported several rural women to run small businesses, the company has greatly enhanced their social status and reduced their economic dependency of male family members.

Last year Sugmya achieved INR 11.7 crore in revenue with a 4.2 crore profit. This year our revenue is estimated at INR 50-55 crore while maintaining a 25-30 percent return on equity (ROE). The company has raised more than 125 crore from over 26 reputed lenders including SBI, Vivriti Capital, MAS Financial, Ananya Finance, UC Inclusive Credit, Western Capital, Profectus Capital, Vedika Credit Capital Ltd, Muthoot Finance and SATYA MicroCapital to name a few.

“We have raised more than INR 30 crores of equity finance from friends and family, HNIs and professional investors. We have a dedicated team for fundraising. Initially, we faced challenges in raising funds, but now since we have a sound track record of more than three years it is easier to raise funds at better rates now. Most of our lenders are doing repeat funding,” Singh said.  

Sugmya Finance has over 100 operational branches across India and the company is planning to increase to 200 by March 24. “While we started providing MSME loans this year, from next FY we are aiming at offering secured loan products to our customers as well. This year we are on our way to achieving INR 300 crore AUM with a target of INR 1,000 Crore of AUM by next FY,” he said.  

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