capital-trust-limited-pledges-to-accelerate-digital-lending-to-scale-up-financial-inclusion-in-india

Capital Trust Limited Pledges to accelerate Digital Lending to Scale up Financial Inclusion in India

 

Celebrating 75 years of Independence of India, named the celebration as ‘Azadi Ka Amrit Mahotsav’, and on the occasion of India’s 73rd Republic Day celebrations, Capital Trust Limited announces its pledge to accelerate digital lending by scaling up financial inclusion of the most underserved and unserved population of India. Today, India has massive growth potential in the digital lending landscape, which is a key goal of the Government of India. The expanding smart phone penetration in India, and the India Stack, are acting as powerful catalysts towards bridging the gap between the borrowers and lenders. Using these tools with an innovative Rural Doorstep-Fintech business model, Capital Trust is accelerating its reach through  its perfect blend of the digital and physical mode.

Capital Trust Limited (Capital Trust), is a digitally enabled non-banking finance company (NBFC), specialising in providing  digital  loans in Tier III to V regions through its 315 branches, spread across 94 districts in 10 states. The ticket size of these loans ranges from ~INR 5,000 to INR 60,000.

Capital Trust has many ‘firsts’ to its credit when it comes to digital lending at the base of the pyramid. For instance, the Company pioneered digital lending via 100% digital disbursements way back in 2015, followed by the launch of Capital Sales smartphone application in 2016; the introduction of geo-tagged digital receipts rather than physical passbook in 2017; the launch of client-facing Capital Connect smartphone application in 2018; and the ushering in of 100% cashless collection as first mode of payment in 2019. Today more than 55% of the borrowers pay digitally on or before due dates through National Automated Clearing House.

Through its journey of more than 36 years, the Company has disbursed loans of more than INR 3,000 crores to  over 9 Lakh borrowers . These loans have not only helped transform the lives of lakhs of people but have also made them active contributors in the growth of the economy.

Commenting upon this, Mr. Yogen Khosla, Chairman and Managing Director, Capital Trust Limited, said, “The Government of India’s target of reaching $5 Trillion economy is only possible through the financial inclusion of people at the bottom of the pyramid via digital lending. We have seen Industry talking about digital lending only after COVID 19, but we had started our digital journey way back in 2015. I feel proud in stating that our processes were so robust that we never needed a refresh button while navigating through the pandemic. I would also like to add that India’s Rural sector is tough enough to bounce back faster and stronger from any given situation, and that gives us added conviction to keep serving the sector”.

“Even though Digital Lending in India has registered a growth of 12x from 2017 to 2020, the ratio of Digital Lending to Physical Lending is still at a nascent stage. The strong growth in Digital Lending indicates the huge untapped potential in India, in which we can play a meaningful role in bridging efficiently through the use of technology. We have seen two COVID 19 waves back to back which had battered the Indian economy to a great extent, but at Capital Trust, we are standing strong with the Capital Digital Initiative’s (loans sources post FY20) collection efficiency at 97% and average collection efficiency of 92% during Q3FY22. The quick bounce back in our collections has been possible due to our strong digital focus and niche technologies. On the back of our digitally enabled processes, we are capable of disbursing loan within 12 business hours to potential borrowers. Moreover, our Database and relationship with more than 9 Lakh customers provides us with immense opportunity to tap the market opportunity”, added Mr. Vahin Khosla, Executive Director, Capital Trust Limited.

capital-trust-limited-announces-expansion-in-branch-network

Capital Trust Limited announces Expansion in Branch Network

 

Capital Trust Limited (Capital Trust), a digitally enabled non-banking finance company (NBFC), specialising in providing incomegenerating micro business loans in tier 3-5 regions, recently enhanced its branch network by opening 71 New branches. Out of these, 20 New branches were opened in Eastern UP; 21 in Bihar; 13 in Jharkhand; 11 in Madhya Pradesh and 6 in Punjab. With this, the total branch network of the company reaches 315 branches spread across 94 districts in 10 states. All the branches are opened on Asset Light model with minimal capex. The ticket size of these loans will range from ~INR 30,000 to 1 Lakh focussed towards MSME Sector.

The company today also announced sanction of additional INR 260 Millions term loan facility by HDFC Bank. HDFC has till date sanctioned INR 970 Millions. The company enjoys comfortable liquidity position with debt equity ratio of 2.0x as on 30th September 2021, which gives enough headroom to further increase disbursements thereby expanding the assets under management without further leveraging the balance sheet.

The strong capital base coupled with enhanced reach via expansion in branch network will help the company to expand its customer base and penetrate deeper in existing markets as well as expand its presence to new geographies. The company has already entered into the partnership/co-lending model with some of the NBFCs and Banks. The company is open to other partnerships/ co-lending with Banks and NBFCs to fund the expansion and also open in new geographies.

Commenting upon this, Mr. Yogen Khosla, Chairman and Managing Director, Capital Trust Limited, said, “During the last 6 months post second wave of COVID-19, rural India has bounced back sharply marked by significant uptick in demand on the back of improved economic activities. Our strategic focus on branch expansion along with our focus to increase liquidity by building a strong capital base will help us in expanding our loan book exponentially and penetrate deeper into newer markets.

capital-trust-announces-q2-&-h1-fy22-financial-results

Capital Trust Announces Q2 & H1 FY22 Financial Results

 

Capital Trust Limited (Capital Trust), a digitally enabled non-banking finance company (NBFC), specialising in providing income generating micro business loans in tier 3-5 regions, announced its financial results for the quarter ended 30th Sep 2021.

Particulars (In INR Millions)

Sep-21

Sep-20

YoY%

June-21

QoQ%

Assets Under Management (AUM)

3108.1

4294.7

-28%

3,374.4

-8%

Total Disbursement

455.1

215.3

111%

110.8

311%

Net Interest Income

127.9

107.2

19%

101.1

27%

Profit After Tax

8.7

8.7

0%

-138

Gross Stage 3 Assets (% of AUM)

3.8%

7.1%

-47%

3.8%

-1%

Net Stage 3 Assets (% of AUM)

0.0%

0.0%

0.0%

90+ Assets (% of AUM)

12.6%

7.7%

64%

15.3%

-18%

Net 90% Assets (% of AUM)

0.0%

2.5%

0.0%

Capital Adequacy*

42.6%

49.8%

-14%

45.2%

-6%

Debt-to-Equity

2.0

1.6

25%

1.9

3%

Commenting on the performance, Mr. Yogen Khosla, Managing Director, Capital Trust Limited, said, “Disbursements for the quarter grew by 311% QoQ on account of improved consumer sentiments and picking up demand across sectors. Our technology-based POS has significantly helped us in penetrating Tier III/IV cities seamlessly. The Collections picked up significantly from 81% in June to 88% in September and 89% in October, it is further expected to improve during H2FY22. The Company being inherently cautious, decided to slow down the disbursements during last year on account of Covid related lockdowns, which has helped us in keeping our asset quality intact. At the same time company has also created adequate provisions to mitigate any further impact on our loan book. We believe worst is behind us on asset quality front and new trajectory of growth is being undertaken by the company. This is further demonstrated by our continuous focus on customer penetration through branch network.

Despite the disruptions caused by COVID-19, Capital Trust has significantly expanded its branch network by opening 71 new branches during the quarter. With this, the total branch network reaches 315 branches spread across 94 Districts covering 10 states. This will help the company in further expanding our customer base, deeper penetration, and access to new markets.

The company’s robust liquidity position, healthy balance sheet, strong leadership combined with the focus on strengthening its rural-doorstep fintech model will certainly fuel its growth going forward.”

*Including investment in wholly owned subsidiaries

Consolidated Financial Highlights

  • Average collection efficiency for Q2 FY22 was 88% for the company and 96% for digital loans sourced post-first lockdown
  • Net worth as on 30th Sept 21 was at INR 1178.0 million
  • Finance cost during Q2 FY22 was INR 155.5 million which were increased by INR 74.9 million as compared to Q1 FY22.
  • Total Provisions outstanding for the year was INR 570.9 million; ECL provision was 161.1 INR million and COVID related provision was INR 409.8 million
  • Strong liquidity position with INR 1152.2 million in cash/bank balance, liquid investments, and fixed deposit
  • Total operational branches as on Sept 30, 2021 stood at 315 covering 94 districts across 10 states
  • Business Correspondent Partnership ties ups with IDFC First Bank, MAS Financials, Dhanvarsha Finvest and OML P2P.

Portfolio Distribution

Particulars (In INR Millions)

Q2 FY22

Q2 FY21

YoY%

Q1 FY22

QoQ%

Digitally Enabled Collection Products

     –  Capital Magic Loan

808.9

532.6

52%

674.9

20%

     –  Micro-Business Loan

653.5

909.9

-28%

759.1

-14%

Total Capital Digital Initiative

1,462.4

1,442.5

1%

1,434

2%

Cash Collections Products

     –  Micro-Enterprise Loan

1,599.3

2,450.5

-35%

1,849.3

-14%

     –  Secured-Enterprise Loan

18.5

203.2

-91%

43.8

-59%

     –  Microfinance Loan

28.0

198.5

-86%

47.3

-40%

Total Legacy Portfolio

1,645.8

2,852.2

-42%

1,940.4

-15%

Total Assets Under Management (AUM)

3,108.1

4,294.7

-28%

3,374.4

-8%

On-Book Portfolio

2,549.4

3,173.0

-20%

2,543.9

0%

Off-Book Portfolio

558.7

1,121.7

-50%

830.5

-33%

Total Assets Under Management (AUM)

3,108.1

4,294.7

-28%

3,374.4

-8%

capital-trust-announces-ptc-transaction-of-about-inr-280-million-with-u-gro-capital-limited

Capital Trust announces PTC Transaction of about INR 280 Million with U GRO Capital Limited

 

Capital Trust Limited (Capital Trust), a digitally enabled non-banking finance company (NBFC), specialising in providing income generating micro business loans in tier 3-5 regions, today announced that it has entered into PTC (Pass Through Certificates) transaction with U GRO Capital Limited, a technology focused small business lending platform.

This is the first time U GRO Capital and Capital Trust have come together for a PTC transaction of about INR 280 million, with amortisation of the pool tenure of 20 months. The instrument is rated BBB+ by ICRA Limited. The tie up will allow Capital Trust to enhance its liquidity and build a strong capital base. The loans underlying the pool will have monthly instalments with original maturity of up to 3 years. With this tie up, Capital Trust will be able to expand its credit portfolio of income generating micro loans among rural India’s underserved population.

Commenting on this development, Mr. Yogen Khosla, Chairman and Managing Director, Capital Trust Limited, said, This transaction is in line with Capital Trust’s balance sheet light business growth model and will help the company expand its lending portfolio at a faster pace without additional burden on the books of the company. The arrangement will enable Capital Trust to expand its digital lending footprint to Tier 3-5 regions primarily in Northern India. The company will continue to enter into such tie ups in near term which will help in building a strong capital base with high liquidity.”