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Company Overview

SBFC FINANCE LTD is a systemically important, non-deposit taking non-banking finance company (“NBFC-ND-SI”) offering Secured MSME Loans and Loans against Gold, with a majority of the borrowers being entrepreneurs, small business owners, self-employed individuals, salaried and working class individuals. Among MSME-focused NBFCs in India, the company has one of the highest assets under management (“AUM”) growth, at a CAGR of 44% in the period from Fiscal 2019 to Fiscal 2023. The company has also witnessed healthy disbursement growth, at a CAGR of 40% between Fiscal 2021 and Fiscal 2023. As of June 20, 2023, approximately only 16.9 million MSMEs have registered on UDYAM, of the estimated 70 million MSMEs in India, leaving a large number of MSMEs without access to organised finance owing to their unregistered status.

As of March 2022, less than 15% of MSMEs have access to credit in any manner and traditional institutions have historically refrained from providing credit to underserved or unserved MSMEs and self-employed individuals, leaving them to resort to credit from informal sources. The credit gap was estimated at around ? 92 trillion in Fiscal 2023, offering growth potential for financial institutions. Further, with increasing presence of MSME lenders in smaller cities and lenders increasingly focusing on underserved customers, the portfolio of secured MSME loans with ticket size between ? 0.50 million and ? 3.00 million is expected to grow at a CAGR of 18% - 20% between Fiscal 2023 and Fiscal 2026. In addition, there has been credit growth in non-metro cities, owing to financial literacy, mobile penetration and government schemes aimed at bringing the unbanked within the formal banking system. As a result, the industry has witnessed an increase in access to formal credit to MSMEs, which could be attributed to the increase in the number of MSMEs registered with the Ministry of Micro, Small and Medium Enterprises, to 13.09 million in Fiscal 2023, from 0.50 million in Fiscal 2016. Accordingly, the company is focused on disbursing loans with a ticket size in the range of ? 0.50 million to ? 3.00 million and as of March 31, 2023, 87.27% of the AUM had a ticket size within this range. The company believes that the products allow many underserved and under banked customers to thrive.

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SEBI Registration number is INM000002483

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