About Micro Capitals Pvt. Ltd

Micro Capitals Private Limited is a privately held company registered with Registrar of Companies as per the Indian Company's act, 1956. Set up in 1991, Micro Capitals Private Limited is a Non Banking Finance Company (NBFC), registered with Reserve Bank of India. As an NBFC, it can conduct business of exchange of money, being it investing, lending, borrowing etc. The company started its retail operations recently after it was acquired by Birla Financial Distribution Private Limited, wholly owned by Global Capital Advisors Limited, London.

In India, there are many levels of lending institution across the country; scheduled commercial banks, non banking financial institutions, co-operative banks, co-operative credit societies, private money lenders, micro finance institutions and there are many more. Depending on the size of the operations and the asset class, there is big variation in the interest rates charged by these institutions. Given the stringent Rules, Regulations and Restrictions imposed by RBI banks including co-operative banks and lending institutions, cannot address requirements of many individuals and businesses in the society. . Sometimes times, banks and lending institution avoid going into these new sector to avoid any probable defaults. Amidst these Rules and Regulation there lies immense market opportunity which are yet not identified and catered. Micro Caps intends to cater these untapped opportunities through its unique and tailor-made bouquet of products.

Micro Caps has five major products, which are available to address business finance and individual finance needs. The company is having certain traditional products like Loan Against Property, Loan Against Shares and Structured Business Loans in their kitty. These are the products which are there in the market since the opening up of Indian economy. However, the usage and reach of these products have gone up multifold in last some years. This is mainly because every individual and business wants to leverage themselves to create higher profitability and growth. The company has designed two innovative products which highly depend on experience and collaboration. These two products are Digital Equipment Financing (DEF) and Franchise Financing (FF). These are new products for the Indian market. The banks and other financial institutions might lend against collateral of fixed/tangible assets. However, such lending's are not done with focus on that particular industry. One can rather call those products as loan against property as fix asset collateral is a prime demand for granting this loan. Micro Caps is intending to finance Digital Equipments like projectors, processing systems etc., which is growing rapidly in the economy. These products are mainly used in entertainment industry. Another new product offered by Micro Caps is a franchise loan. The franchise loan provides assistance to the upcoming franchises after executing agreement of understanding with the franchisor. These industries are yet to be recognized by any big lending institution or bank as they neither have an expertise in evaluating such borrowers nor can tackle default scenarios. We see a huge potential in both of these two areas in coming 5 to 7 years.

Initially, the company is planning to have some million dollars of lending into these five products. This will help the company to establish itself as an acceptable lender in the Indian financial market. Micro Caps has a unique strategy to work on new market segments like Digital Equipment Financing and Franchise Financing. For these two products, the company is planning to tie up with industry leaders in the respective areas. These industry leaders will sign an MOU with Micro Caps to create this new market area. A detailed review is le down in the product segment. Initially, Micro Caps will choose to work with two or three established players in the market. After completion of the first phase of expansion, the company would decide on working with new corporate. The company also plans for an expansion to other Metro cities and have its representative offices there.

Our gamut of loan products is meant for new as well as existing businesses. In certain cases, we may extend our loans to individual customers also. Our customer could be a start-up business where we have a franchise finance or digital equipment finance for them. It could be an existing business, where we offer them LAP and LAS to leverage their corporate assets. For existing businesses, if they need to have a bridge loan for matching their cash flows, we are there to support them through SBL. We are working on many innovative ways to run this lending business. As a policy company has decided to give SBL product only through the reference of our existing customers to minimize default risk.

The estimated market size, for all these products together, is estimated to be $26 billion. Micro Caps is targeting to grab only 0.4% of these estimated market in the next 4 years with of AUM of $100 million. If the company succeeds in achieving this target, it will have the first mover's advantage as far as the new product areas are concerned.