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Over the last two years, the SME and MSME sectors have been the focus area of lenders, thanks to online players. However, with more focus on this segment, it is expected that a big chunk of bad loans will emanate in the next few years, thus providing an opportunity to debt management firms waiting to tap this opportunity.
One such company is the Mumbai-headquartered debt-collection firm SecureDebt, which is already expanding its team and operations to help resolve the delinquencies, if any, arising out of this segment. As per a recent report by Omidyar Network, lending to the SME/MSME segment is projected to increase between 10 and 15 times by 2023, scaling up to ₹6-7 lakh crore ($80-$100 billion) in annual disbursements.
Founded by a former banker, Gagan Kumar, and marketing professional, Biswaranjan Satpathy, in 2015, SecureDebt Management Consultants LLP, currently manages retail/SME debts aggregating more than $1 billion, and offers debt resolution services, along with merger and acquisition leads to banks, NBFCs, fintechs and telecom operators. It has already helped its clients recover debts to the tune of over ₹1,000 crore in the last three years.
For FY19, it expects to recover debts worth ₹300 crore, with a majority coming in from the retail and SME segments. With the company’s current pipeline of cases in IBC, it expects to double this number in the next fiscal.
Gagan Kumar, founder and managing partner, SecureDebt, told BusinessLine that while for bigger corporates IBC (Insolvency and Bankruptcy Code) is the way to resolve their delinquencies, it is not the case with SMEs.
“With renewed lending focus in SME sector where we are seeing NBFCs and private banks penetrating into tier II and tier III cities, IBC will have a limited role to play. We are looking at much higher volumes in terms of the number of accounts with low-ticket sizes in the range of a few millions, which will need varied delinquency/NPA treatment tools,” said Gagan, adding that the company anticipates a huge debt collection opportunity coming out of this sector.
SecureDebt has already created a separate team that is being specially trained for SME debt resolutions, collections and recovery, as SMEs have to be approached and handled very differently from a retail customer, said its co-founder Satpathy.
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