MICROCAPITAL BRIEF: FMO Issuing Senior, Secured Loan of $10m in Local Currency to NeoGrowth for Microfinance Lending in India

The Dutch development bank Financierings-Maatschappij voor Ontwikkelingslanden (FMO) recently signed a senior, secured facility equivalent to USD 10 million in local currency to India’s NeoGrowth to expand its lending to microenterprises. Founded in 2013, NeoGrowth provides loans to micro-, small, and medium-sized enterprises (MSMEs) based on their digital payment histories, rather than traditional credit histories. The company offers collateral-based and collateral-free loans of up to INR 15 million (USD 190,000). As of 2022, the organization serves 20,000 clients in 25 cities via 29 branches. NeoGrowth reports approximately INR 15.6 billion (USD 200 million) in assets.

Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private investors. The institution works toward the UN Sustainable Development Goals by funding capacity development and placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. As of December 2021, FMO reports a total committed portfolio of EUR 9.7 billion (USD 10.2 billion), having brought in net profit of EUR 491 million (USD 518 million) during that year.

By Nithin Naren, Research Associate

Sources and Additional Resources

FMO press release
https://www.fmo.nl/news-detail/8e996b2d-d418-4fce-ac0e-c71550e166c3/monthly-transaction-overview-july

NeoGrowth homepage
https://www.neogrowth.in

NeoGrowth financial statement
https://www.neogrowth.in/wp-content/themes/neogrowth/assets/images/pdf/NeoGrowth_Annual_Report_2022.pdf

Previous MicroCapital article on FMO
https://www.microcapital.org/microcapital-brief-im-bank-of-kenya-secures-15m-guarantee-from-fmo-to-support-msme-growth%ef%bf%bc/

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