Mumbai-based digital lending platform NeoGrowth has raised ₹85 crore ($8.8 million) in a mix of debt and equity led by Dutch development bank FMO and LeapFrog Investments. The fresh capital will help scale the company’s digital lending capabilities and deepen its presence in the Indian MSME credit market.
- NeoGrowth raised ₹85 Cr led by FMO and LeapFrog.
- Uses AI-powered underwriting to serve MSMEs nationwide.
- Indian NBFC sector’s credit share hit 26% of GDP in 2026.
What happened
NeoGrowth, an Indian digital lending platform focused on MSMEs, announced the completion of an ₹85 crore funding round comprising both debt and equity. The round was led by the Dutch development bank FMO with participation from LeapFrog Investments. This new capital infusion is aimed at strengthening NeoGrowth’s digital lending infrastructure and expanding its market reach across India.
Founded by brothers Dhruv and Piyush Khaitan in 2012, NeoGrowth provides collateral-free loans ranging from ₹5 to 75 lakh tailored to over 75 business sectors. The company employs sophisticated AI initiatives to improve underwriting, portfolio monitoring, and risk management, offering flexible repayment options such as daily installments.
Why it matters
MSMEs in India face substantial challenges in accessing formal credit despite being the country’s second largest employer. NeoGrowth’s focus on this underserved segment, combined with AI-driven lending and diverse loan products, positions it as a growing enabler of financial inclusion for small businesses. The platform’s AUM stands at nearly ₹2,000 crore, having disbursed over ₹16,000 crore in total loans so far.
The recent funding round highlights increasing investor confidence in NBFCs serving MSMEs digitally. The broader non-banking financial company (NBFC) sector accounted for nearly 26% of India’s GDP credit market by 2026. With competitors like Indifi Capital and Lendingkart also expanding aggressively, the digital lending ecosystem for MSMEs is becoming a critical element of India’s economic infrastructure.
What to watch next
NeoGrowth plans to leverage the ₹85 crore funding to scale its digital lending operations further and deepen penetration in Indian regional markets, expanding its branch network beyond the current 46 locations. Continued enhancement of its AI underwriting platform could improve credit risk management and enable faster loan disbursals to small enterprises.
The digital NBFC segment is poised for significant growth, with several players preparing to enter public markets to raise capital. Market watchers will be monitoring NeoGrowth’s ability to sustain growth while maintaining asset quality, as well as its potential moves towards IPO or further strategic partnerships in an evolving credit landscape.