Instant loan provider mPokket is hopeful of increasing disbursement to Rs 2,000 crore in the current financial year from Rs 1,200 crore a year ago on the back of a pick-up in economic activity and decline in COVID-19-induced delinquency said its founder and CEO Gaurav Jalan.
The lockdown-triggered slowdown in economic activity has eventually led to a rapid increase in the adoption of online commerce, he said adding that the trend is likely to continue in the immediate future and would pick up with growth bouncing back. 'We disbursed Rs 1,200 crore in 2020-21 and expect to disburse more than Rs 2,000 crore in 2021-22,' said Jalan whose company is engaged in providing loans ranging from Rs 500 to Rs 20,000 through a lending app.
Jalan said that over time, the company will aim to continue making its products available to newer customer segments, such as self-employed people and micro-businesses. In due course, mPokket is also looking to expand its suite of products in an effort to provide customers with more options, both in terms of credit as well as other financial products.
'But, to answer your question specifically, we want our disbursements to grow between 70 percent and 100 percent year-on-year in FY2021-22,' he said in an interaction with PTI. When asked about the company's plan to raise funds, Jalan said that while he cannot discuss specifics, given the company's high rate of growth, 'we need to periodically raise capital, either in the form of debt or equity'.
Debt raising, he added, is a continuous process for all lending companies, and mPokket is also in discussions with multiple domestic and international lenders at any point in time. 'We also remain in touch with multiple equity investors and will choose to do an equity raise at the right time,' he said.
On major challenges being faced by the financial services companies in the current scenario, he said the onset of the lockdown triggered a general slowdown in economic activity, which adversely affected financial services. Thankfully, that also subsequently led to a rapid increase in the adoption of online commerce, he added. 'That said, lendtech companies faced a slightly different dynamic.
'Many borrowers were faced with a cash flow disruption with the advent of the lockdown, and this situation persisted for a longer period of time,' he said adding the RBI moratorium on loan repayments did not help matters either. As a result, financial services were, in general, impacted negatively, as loan repayments declined materially during the lockdown. As the first wave trailed off, economic activities began to rebound and delinquency trends started to taper off, Jalan said.
According to him, given the current economic scenario, both individuals and small businesses will continue to remain under stress, despite incremental improvements with the lifting of COVID-19 restrictions. These segments are likely to continue reporting elevated NPAs, compared to their pre-COVID-19 levels.