Neogrowth raises USD 20 million from DFC

Mumbai: Tech-based non-banking lender Neogrowth which focuses on small businesses, has secured USD 20 million (around Rs 165 crore) in funding from the International Development Finance Corporation (DFC) through the external commercial borrowing route.

Neogrowth is backed by renowned investors such as Omidyar Network, Light rock, Khosla Impact, Accion Frontier Inclusion Fund, Quona Capital, IIFL Seed Ventures Fund, WestBridge, and Leapfrog Investments.

The American development finance institution partners with the private sector in the developing world to offer finance solutions. It invests across sectors, including energy, healthcare, critical infrastructure, and technology.

Arun Nayyar, chief executive of Neogrowth, said the funding will be used for onward lending to small businesses. This funding commitment is for five years with a two-year moratorium on principal payment, he said in a statement on Tuesday.

James Polan, DFC's vice president of the office of development credit, said the investment in Neogrowth will increase access to capital for small businesses. Its digital, flexible model enables the company to reach out to more small businesses, promoting financial inclusion, economic growth, and development.

Neogrowth serves over 1 lakh MSME customers spanning over 70 segments and has disbursed over USD 1 billion across 25 locations.