Moneyboxx Finance Ltd Management Discussions

Management Discussion and Analysis

Macro economy overview

The global economy remained resilient in 2024, navigating diverse regional growth trends shaped by policies, geopolitical shifts and industry dynamics. While some parts of Asia and Europe experienced slower economic performance, the United States continued to maintain strong growth momentum. The global economy expanded by 3.3% in 2024, slightly lower than the 3.5% growth recorded in 2023. While global disinflation persisted through the year, its pace slowed due to sustained services inflation in major economies and ongoing inflationary pressures in some emerging markets.

India has been one of the fastest-growing economies, supported by strong domestic demand, a young workforce and expanding digital infrastructure. While global environment remained challenging, the Indian economy remained resilient during the FY 2024-25, driven by stable macroeconomic foundations and strategic policy measures. Inflation eased and moved below the target by the end of the year. The financial sector remained resilient and robust on the back of healthier bank and non-bank balance sheets, improved asset quality and capital buffers that enabled double-digit credit growth. On fiscal front, the central government continued with its efforts towards fiscal consolidation, supported by buoyant tax revenues, while maintaining the thrust on expenditure quality.

P-Projection

Source: * Ministry of Statistics and Programme Implementation (MOSPI) Report dated 28^th February 2025

#Reserve Bank of India (RBI) Monetary Policy Committee (MPC) report dated 9^th April 2025

The RBI forecasts a 6.5% GDP growth for India In FY 2025-26, driven by strong domestic demand, steady Investment and credit expansion. Stable financial conditions and moderating inflation create a favourable environment for sustained growth, keeping the economy on a steady path forward. The RBI revised the repo rate thrice between Feb25 and Jun25, bringing the rate down by 100 basis points to 5.50% to support growth amidst moderating inflation. Additionally, the central bank reduced risk weights for bank lending to NBFCs and unsecured loans back to earlier levels which may improve the flow of bank credit to these segment.

Source: MOSPI

Industry Overview

Bank credit growth moderated in FY 2024-25, with overall offtake reflecting the impact of a high base and cautious lending amid elevated credit-to-deposit ratios. As of March 21, 2025, credit offtake stood at Rs.182.44 lakh crore, registering a year-on-year growth of 11.0%, lower than the 20.2% growth recorded In the previous year. The deceleration In growth Is largely due to a high base effect and concerns over the elevated credit-to-deposit ratio. Within the priority sector, credit growth was slower across all segments except medium enterprises.

Bank deposits grew by 10.3% y-o-y to Rs.225.7 lakh crore as of the same date, compared to 12.8% growth a year earlier. The moderation in deposit growth is mainly driven by a declining share of household deposits, the high base effect and relatively lower interest rates on deposits.

Indian Non-Banking Financial Companies (NBFC) sector review

NBFCs play an essential role in credit delivery to important sectors of the economy including Micro, Small and Medium Enterprises (MSMEs) and self-employed Individuals. Their broad geographic presence, strong understanding of financial needs and fast processing capabilities enable them to efficiently serve a diverse range of borrowers.

The NBFC sector has grown considerably, with many new players adopting different business models. In recent years, Indias financial services industry has undergone a major transformation, influenced by the increasing use of neo-banking, digital authentication, UPI transactions and the widespread availability of mobile internet. These developments have made financial services, especially credit, more accessible and tailored to the needs of a diverse consumer base.

In FY 2024-25, the NBFC sector witnessed strong credit growth of 20%, outpacing the 11% growth recorded by banks. This growth was largely driven by high growth rates of Gold loan NBFCs. The Net Interest Margin (NIM) for banks and NBFCs over the past four financial years has remained relatively stable. For NBFCs, NIM Improved from 6.0% In FY 2021-22 to 6.5% In FY 2022-23 and further to 6.7% In FY 2023-24 and FY 2024-25. However, credit costs for NBFCs increased from 1.3% to 1.7% in FY 2024-25, indicating a rise in delinquencies or provisioning requirements, whereas banks saw improved credit cost levels, declining from 0.6% to 0.4%.

1. Taper Tantrum crisis of 2013 refers to foreign investors pulling out money from equities and bonds in emerging markets as a reaction to US Fed announcement of reducing/ceasing its bond purchase program; this led to a tightening of liquidity available in the market, impacting both banks & NBFCs Note: Analysis has been made based on 31 NBFCs (9 HFCs, 2 Gold, 3 MFI, 1 Cards and 16 Diversified NBFCs) and 37 Banks (12 PSBs, 10 Private-New, 10 Private-Old Banks and 5 Small Finance Banks)

Source: BCG Consulting Report

The GNPA ratio of NBFCs has consistently declined from 4.5% in FY 2021-22 to 3.5% in FY 2022-23 and further to 2.7% in FY 2023-24, reaching 2.6% in FY 2024-25. Despite a year-on-year decline in capital adequacy ratios for most NBFCs, the sector remains well-capitalised, with the Capital to Risk-Weighted Assets Ratio (CRAR) staying above the regulatory minimum of 15%.

Industry Outlook

NBFCs are projected to witness an upswing in performance during the latter half of FY 2025-26, following a relatively muted first half marked by subdued AUM expansion, elevated credit costs and limited asset quality improvement. Stability in the unsecured lending and microfinance segments, along with improved rainfall patterns, would help revive rural demand. This, combined with government- led development initiatives, is expected to lift credit appetite across borrower categories. The overall outlook for the sector is expected to remain stable in FY 2025-26. However, the NBFC-microfinance segment may continue to face challenges, with growth likely to stay moderate and credit costs relatively high - though an improvement over the more stressful conditions seen in FY 2024-25.

New regulatory frameworks around co-lending, gold-backed loans and non-fund-based facilities are poised to reinforce governance and operational transparency. The sector continues to be seen as a vital contributor to financial inclusion and credit delivery, especially in underserved regions.

Source: Emkay Research

Major Regulatory Updates in the NBFC sector The RBI regularly updates prudential norms to reflect changing economic conditions, emphasising the crucial role of NBFCs in maintaining financial system stability. The proactive regulatory framework, along with strict enforcement actions, plays a crucial role in balancing risk and growth in the NBFC sector. Key regulations, such as scale-based norms, alignment of Income Recognition, Asset Classification and Provisioning (IRAC) norms with banks and capital allocation for investments in Alternative Investment Funds (AIFs), have strengthened the sector. The key regulatory changes in FY 2024-25 included:

• Scale-Based Regulation

The RBI, on January 16, 2025, released the list of NBFCs classified under the Upper Layer as per the Scale-Based Regulation framework for FY 2024-25. Initially introduced in 2021, this framework classifies NBFCs into different layers based on asset size and a defined scoring methodology, with those in the Upper Layer being subject to more stringent regulatory requirements. Once classified under this category, an NBFC remains subject to enhanced regulatory oversight for at least five years, regardless of whether it continues to meet the criteria in subsequent years.

• Reversal of Increased Risk Weights on Bank Exposures to NBFCs

On February 8, 2025, the RBI reversed the 25-percentage- point increase in risk weights on Scheduled Commercial Banks (SCBs) exposures to NBFCs, which had been imposed in November 2023. The reversal will take effect from April 1, 2025 and is expected to improve bank lending to the NBFC sector by easing capital constraints.

• Revised Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Registration Norms under CGS-II

On February 15, 2025, the CGTMSE issued revised registration norms for NBFCs under the CGS-II scheme. The updated guidelines distinguish NBFCs with less than and more than three years of operations and tighten eligibility criteria related to capital, asset quality (NPA levels), profitability and minimum net owned funds.

• Draft Directions on

o Co-Lending Arrangements

On April 2, 2025, the RBI released draft guidelines on co-lending arrangements between banks and NBFCs. These include norms on blended interest rates, a 5% cap on Default Loss Guarantee (DLG), borrower-level NPA tagging and full disclosure of fees and partnership arrangements. Final co-lending arrangement directions was released on August 6, 2025.

o Non-Fund Based Credit Facilities

On April 10, 2025, the RBI issued draft directions allowing NBFCs in the middle and upper layers to offer non-fund-based credit facilities such as performance guarantees. These are capped at 5% of total assets, with unsecured guarantees limited to 25% of that amount and a maximum permissible tenure of 10 years.

o Lending Against Gold Collateral

On April 18, 2025, the RBI proposed draft norms for gold-backed loans issued by NBFCs. The guidelines cap the Loan-to-Value (LTV) ratio at 75%, regardless of the loans end use and mandate standardised gold valuation, secure storage practices, periodic audits and strengthened customer conduct norms.

• Harmonised HFC Regulations

The RBI increased the liquid asset requirement for Housing Finance Companies (HFCs) from 13% to 15% of public deposits to ensure better financial stability. Additionally, HFCs are now required to maintain full asset coverage for all public deposits, reducing the risk of defaults. New regulations also mandate annual Rs.investment-grade credit ratings for HFCs holding public deposits.

• Alignment of HFC NCD Guidelines with NBFCs

On January 25, 2025, the RBI aligned HFCs with NBFC regulations for private placements of Non-Convertible Debentures (NCDs) with maturities exceeding one year.This move repealed the earlier HFC-specific norms and brought uniformity in regulatory treatment.

• Key Facts Statement (KFS) Implementation

NBFCs and banks are required to provide a Key Facts Statement (KFS) to borrowers before loan disbursement, ensuring greater transparency and informed financial decisions. Effective October I, 2024, this document clearly outlines interest rates, processing fees and other charges, making loan agreements more transparent. This initiative helps reduce hidden costs and enhances borrower awareness in financial transactions.

Source: BCG Consulting Report

Opportunities and Threats

NBFCs operate under a simplified regulatory framework, enabling swift decision-making and greater operational flexibility. These streamlined regulations also support their rapid expansion into new regions and sectors, contributing to accelerated growth.

Opportunities

• Significant unfulfilled credit need in the small business loan sector

A significant credit gap exists for micro-enterprise borrowers, particularly in semi urban and rural areas of the country, Traditional lenders face challenges in serving these businesses due to difficulties in assessing income and cash flow, as many lack formal business documents such as tax returns, accounting records and bank statements. Additional barriers include limited high-quality collateral, minimal digital footprints and insufficient credit histories.

• Growing Retail Lending

NBFCs are experiencing rising demand for retail credit, particularly in MSME, consumer and vehicle financing segments. This growth is strengthened by increasing consumer spending, business expansion needs and financial inclusion initiatives. Unlike banks, NBFCs offer more flexible lending solutions, making credit accessible to a wider range of borrowers. Their ability to provide quick and tailored financing further strengthens their market presence.

• Budget Boost for MSMEs to Expand NBFC Growth

The Union Budget 2025-26 introduces key measures to boost the MSME sector by enhancing credit access, supporting firsttime entrepreneurs and promoting labour-intensive industries, MSME classification thresholds have been increased, enabling businesses to scale operations. Credit guarantee cover has been doubled for small enterprises and startups, while a new Rs.10,000 crore Fund of Funds aims to support emerging businesses, A Credit Card scheme will provide micro-enterprises with easy access to Rs.5 lakh in credit. Sectoral support includes dedicated schemes for footwear, leather and toy manufacturing, creating employment and imparting competitiveness, MSMEs contribute significantly to Indias economy, employing over II crore people and accounting for 48% of total exports,

The budget enhances export-focused financing and promotes clean tech manufacturing under the Make in India initiative. Government schemes such as PM Vishwakarma, Udyam Registration and (Prime Ministers Employment Generation Programme) PMEGP continue to empower MSMEs through financial aid, skill development and procurement policies.With increasing GVA contributions and a rise in MSME exports, the budget reinforces their role in positioning India as a global manufacturing hub,

• Specialised Product Offerings

NBFCs provide tailored financial products such as microfinance, consumer loans and vehicle financing to meet specific market needs. By focusing on these areas, they offer flexible and innovative solutions that traditional banks may not provide, effectively serving niche and underserved markets.

• Digital Transformation

NBFCs are increasingly using Artificial intelligence (AI), big data and automation to streamline credit assessments and reduce operational inefficiencies. Digital lending platforms enable faster loan approvals, better risk assessment and enhanced customer experience. The use of digital KYC, e-signatures and alternative credit scoring has widened access to credit for underserved segments, This transformation is helping NBFCs scale operations efficiently while maintaining strong risk management.

• Partnerships Trends

Partnering with banks, fintech firms and other financial institutions helps NBFCs expand their products, reach more customers and make better use of shared resources. These collaborations drive financial inclusion by offering tailored solutions to underserved markets. They also enable NBFCs to leverage advanced technology, optimise risk management and improve operational efficiency.

Threats

• Policy & Regulatory Changes

NBFCs operate in a highly regulated environment and policy or regulatory changes can affect their business models and operational flexibility. However, financial inclusion and priority sector lending continue to be key policy priorities. A supportive regulatory environment enables NBFCs to play a vital role in expanding financial access through lending partnerships with banks.

• Competition

Traditional banks, with their lower cost of funds, are expanding into segments that were previously dominated by NBFCs. Growing competition in MSME and consumer lending may lead NBFCs to reduce interest rates. Larger financial institutions have strong brand trust and regulatory backing, which gives them a competitive advantage and makes it more challenging for NBFCs to attract customers. NBFCs are expected to focus on customised offerings, faster processing and customercentric services.

• Funding Challenges

NBFCs may face challenges in securing adequate funding for growth as banks deal with higher credit-deposit ratios. Limited access to affordable capital can impact liquidity, slowing loan disbursements and expansion. Rising borrowing costs may also affect margins, making it harder to offer competitive interest rates. To address this, diversifying funding sources and exploring options like securitisation and bonds will be essential.

• Economic Uncertainties

Inflation, interest rate fluctuations and global economic instability could impact borrowing costs and credit demand. A slowdown in economic activity may reduce loan demand, affecting the growth trajectory of NBFCs. Higher interest rates could make borrowing more expensive for both NBFCs and their customers.

• Market volatility, credit and liquidity risks Economic slowdowns, interest rate fluctuations and market uncertainties can impact NBFCs stability by increasing default risks and liquidity challenges. However, strong underwriting practices, a well-balanced capital structure and robust liquidity management help mitigate these risks. Building on a strong foundation, the sector has demonstrated resilience, supported by adequate capital buffers, adaptability to market shifts and favourable policy measures, particularly for those focused-on priority sector lending.

Company Overview

Moneyboxx Finance Limited (hereafter referred to as Moneyboxx or Rs.the Company) is a base layer NBFC dedicated to bridging the financial gap for the underserved micro enterprises segment. The Company has a strong commitment to financial inclusion and empowers small businesses and entrepreneurs by providing accessible and tailored credit solutions.The company has established a strong franchise of 163 branches spread across 12 states in India.

The Company supports micro-enterprises in semi-urban and rural areas by providing them secured and unsecured business loans for enterprises engaged in sectors such as livestock, kirana stores, retail trading, services and small manufacturers. The Company plays a vital role in empowering small businesses, driving economic growth and generating employment by offering business loans ranging from Rs.I to Rs.10 lakh.

Target market & product strategy

• Target Customer

The Company provides accessible credit to micro and small enterprises.

• Target Geographics

Cater to unmet and growing credit needs of small businesses in semi-urban and rural India. Gained national presence covering all key markets in northern, central, western and southern states; its strategic growth aims to establish a strong pan-India presence, ensuring wider accessibility and coverage across key markets.

• Product

The Company provides secured and unsecured business loans ranging from Rs.I to Rs.10 lakh with a strategic focus on secured lending, the aim is to increase its share from 45% of AUM in March 2025 to over 65% by March 2026.

• Origination

A direct-to-customer approach enables a deeper understanding of customer needs and creditworthiness. This model supports strong underwriting practices, long-term customer relationships and a high rate of repeat business.

Moneyboxx is committed to driving sustainable social impact by increasing borrowers income levels. Since its inception, the Company has supported over 2,00,000 borrowers by disbursing more than 1,00,000 loans, amounting to over Rs. 1,800 crore as of March 2025.Through its efforts, Moneyboxx plays a key role in advancing financial inclusion and promoting gender equality. Women entrepreneurs accounted for 57% of the total disbursement mix, while 30% of the borrowers were new-to-credit customers. Moneyboxx has been selected by the Dell Foundation for a three-year impact study in FY 2023-24, recognising its contribution to impact financing.

Overcoming financial inclusion challenges in India India has achieved significant progress in financial inclusion, with bank account ownership rising from 53% in 2014 to 80% by January 2025, driven by initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY), Aadhaar and UPI, according to an E&Y report. With a strong digital public infrastructure in place, the country has the opportunity to harness automation, Al and data analytics to drive India towards global leadership in financial inclusion.

UPl is the preferred transaction mode for nearly 38% of individuals in rural and semi-urban India. Strengthening digital financial inclusion is essential to providing more people, especially in rural areas, with affordable financial services. Moneyboxx plays a key role in supporting financing, ensuring greater access to financial solutions.

Moneyboxxs lending is eligible for priority sector lending The RBI has established Priority Sector Lending (PSL) targets for banks in India to promote inclusive development and support the United Nations Sustainable Development Goals (SDGs). Banks including foreign banks, must allocate 40% of their adjusted net bank credit to designated priority sectors, with sub-targets of 18% for agriculture (including 10% for small and marginal farmers), 7.5% for micro-enterprises and 12% for advances to weaker sections.

Moneyboxx plays a vital role in promoting financial inclusion alongside banks and lending partners. All loans provided by the Company qualify for priority sector lending.

Operational overview

Operations & Business	FY22	FY23	FY24	FY25
Branches	30	61	100	163
States	5	6	8	12
Gross Disbursements ( crore)	112	341	665	595
Cumulative Disbursements ( crore)	202	543	I207	1802
AUM ( crore)	121	344	730	927
% Secured Loan Book	-	6%	24%	45%

Moneyboxx has built a scalable, technology-driven branch model to tap into the growing demand for small business loans ( I to 10 lakh) in semi urban India. The Company has achieved significant growth, with its AUM increasing about three times from Rs.344 crore in March 2023 to Rs.927 crore in March 2025. This growth is driven by expanding its branch network, improving branch productivity and strengthening lending partnerships.

Moneyboxx further diversified its geographic presence by entering into key southern states - Telangana, Andhra Pradesh, Karnataka and Tamil Nadu. It has also successfully transitioned to secured lending, with secured loans making up 45% of its total AUM as of March 2025, up from just 24% a year ago. The Company now aims to increase its secured loan portfolio to over 65% by March 2026.

Moneyboxx has strategically spread its AUM across different regions while focusing on key sectors. This approach has improved the stability and quality of its loan portfolio, supporting steady growth and effective risk management.

AU M by States	Mar-24	Mar-25	Mar-24	Mar-25
	(Rs. Crore)		(% Share)
Rajasthan	176	160	24.1%	17.3%
Madhya Pradesh	218	290	29.9%	31.3%
Haryana	122	106	16.7%	11.4%
Uttar Pradesh	92	150	12.6%	16.1%
Punjab	90	91	12.3%	9.8%
Chhattisgarh	26	26	3.6%	2.8%
Bihar	5	37	0.7%	4.0%
Gujarat	1	44	0.1%	4.7%
South India*	-	23	-	2.6%
Grand Total	730	927	100.0%	100.0%

*includes Andhra Pradesh, Telangana, Karnataka and Tamil Nadu.

Key competitive strengths and strategies

1. Innovative Rs.Phygital Lending Model

Moneyboxx follows a unique Rs.phygital model, integrating physical support with digital processes to simplify small business lending and reduce documentation challenges. The Company ensures fast and effective credit delivery by leveraging data analytics and automation.With a user-friendly Mobile App - Sikka, customers can check loan details, apply for new or top-up loans and start micro-savings with just Rs.I0 investment in digital gold. Loan disbursements are completed in a short span of time, ensuring a smooth and efficient financial experience.

2. Customer-Focused Strategy

Direct-to-Customer

• Strong customer understanding through direct sourcing without third-party dependence

• Emphasis on a relationship-driven approach rather than a product-focused model

Digital Approach

• Fully digital processes covering onboarding, credit assessment, approval, disbursement, collection, reporting and analysis

• Utilising information technology for seamless and efficient credit delivery

Robust Underwriting

• Strong credit underwriting backed by non-traditional and alternative non-financial data sources

• In-depth analysis of target customers enterprises with customised underwriting approaches for a diverse range of micro-entrepreneurs

3. A well-balanced and diversified business model

Moneyboxxs strong geographic presence and focus on essential sectors have enhanced its resilience, leading to a strong loan portfolio.The Company has successfully increased its share of secured lending, growing from 24% last year to 45% in FY 2024-25, targeting to reach 65% by March 2026. Moneyboxx successfully diversified its AUM and expanded into South India in FY 2024-25, strengthening its pan-India presence

4. Huge untapped opportunity

The small business loan segment ranging from Rs.1-10 lakh remains significantly underserved, presenting a considerable growth opportunity. Moneyboxx is strategically positioned to scale its AUM and extend its reach, backed by a proven operational framework and strong underwriting expertise.

5. Improving financial access

Moneyboxx provides credit for income-generating activities, benefiting over 2,00,000 borrowers (including co-borrowers), with total disbursements exceeding Rs.1,800 crore since inception.The Company is driving financial inclusion, with 57% of its borrowers being women and 30% from the new-to- credit segment.

6. Initiatives beyond lending

In addition to financial support, Moneyboxx has introduced initiatives to create a broader impact. The Company employs full-time veterinarians at its branches, providing livestock borrowers with free guidance on cattle health, nutrition and breed improvement, helping enhance milk production. Moneyboxx also promotes sustainable farming by distributing and maintaining fruit-bearing trees at no cost for agricultural borrowers, supported by CSR partnerships and internal funding. As of March 2025, the Company had planted over 16,000 fruitbearing trees, provided free veterinary consultations to over 53,000 livestock borrowers and conducted health assessments for more than 5 lakh cattle. These efforts aim to generate long-term benefits, including higher borrower incomes, environmental conservation through soil preservation, better air quality and improved sustainability in food production.

Operating Performance

Particulars	FY24	FY25	%YoY
Branches	100	163	63%
Active Customers	52,178	62,385	20%
Employees	1,300	2,003	54%
Business ( crore)
Disbursements during the year	665	595	-11%
AUM as of March 31	730	927	27%
Fund Raise ( crore)
Equity Capital raised during the year	85.1	91.8	8%
Debt raised during the year	375.7	494.0	31%
Debt repaid during the year	-170.6	-300.8	76%
Capital Position ( crore)
Equity as of March 31	168	261	55%
Debt as of March 31	444	636	43%

Financial Performance

Profitability ( crore)	FY24	FY25	%YoY
Total Income	128.0	199.2	56%
Finance Cost	42.8	63.3	48%
Net total income	85.2	135.9	60%
Operating expenses	67.5	104.8	55%
Pre-impairment operating profit	17.7	31.1	76%
Impairment on financial instruments	7.1	28.1	296%
Profit before tax (PBT)	10.6	3.0	-72%
Profit after tax (PAT)	9.1	1.2	-86%
Profitability ratios (%)
Net total income (% of average AUM)	16.1%	16.6%
Operating expenses (% of average AUM)	12.7%	12.8%
Pre-impairment profits  (% of average AUM)	3.3%	3.8%
Impairments (% of average AUM)	1.3%	3.4%
ROA (PAT/average assets)	1.8%	0.2%
ROE (PAT/average equity)	8.1%	0.6%

Significant expansion in Operations

The Company achieved 27% growth in AUM, reaching Rs.927 crore as of March 31,2025. This growth was driven by an extended branch network, higher productivity and increased lending partnerships. As of March 2025, Moneyboxx had grown to 163 branches across 12 states in FY 2024-25, up from 100 branches in 8 states in the previous year. Secured lending saw strong growth, increasing from 24% of AUM at the end of FY 2023-24 to 45% at the end of FY 2024-25.

Segment-wise & Product-wise Performance

Moneyboxx offers business loans in the range of Rs.1 lakh to Rs.10 lakh, catering exclusively to micro-enterprises in semi-urban and rural areas. These loans are designed to provide entrepreneurs with access to working capital and support their business growth. The Company is committed to becoming the preferred lending partner for deserving micro-enterprises across India.

During the year, Moneyboxx achieved 27% growth in Assets Under Management (AUM) as of March 2025, primarily driven by branch expansion.

Operating expenses to stabilise going forward

Company reported 56% growth in Total income and 60% growth in Net total income after finance costs, supported by AUM growth and expansion. Operating expense grew by 55% due to expansion in operations. While operating performance was strong with Preimpairment profits growing by 76%, significant increase in credit costs in unsecured loans led to a decline in profitability.

Net total income (Total income less finance cost) as % of average AUM improved from 16.1% last year to 16.6% in FY 2024-25, supported by a decline in cost of borrowings, while Opex ratio increased slightly by 0.1% to 12.8% in FY 2024-25 due to expansion of operations and lower-than-expected AUM growth. Despite expansion, pre-impairment profits improved from 3.3% in FY 2023-24 to 3.8% in FY 2024-25, however, increase in impairments (credit cost) from 1.3% in FY 2023-24 to 3.4% in FY 2024-25 led to a decline in profitability ratios, with Return on Equity (ROE) declining from 8.1% in FY 2023-24 to 0.6% in FY 2024-25.

Strong underwriting capabilities

Moneyboxx maintains robust asset quality metrics, supported by stringent underwriting practices along with a strategic focus on essential sectors and an increasing emphasis on secured lending. While the company experienced increase in delinquency and credit cost in FY 2024-25, mirroring the industry-wide trend, it managed the asset quality effectively by intensifying collection efforts and tightening of underwriting standards. The Company expects stabilization in asset quality with implementation of these measures and focus on secured lending.

Asset Quality	31 March 2024	31 March 2025
Gross NPA Ratio	1.51%	6.61%
Net NPA Ratio	0.76%	3.42%

Funding Ratios

Leverage Ratios	31 March 2024	31 March 2025
CRAR %	28.28%	29.25%
Tier I CRAR	27.81%	29.04%
Tier II CRAR	0.48%	0.21%
Leverage Ratio (Total Outside Liabilities/Owned Funds)	3.54%	3.09%
Debt to Equity Ratio	2.63%	2.44%

The Company strengthened its capital position by announcing an equity raise of Rs.175.8 crore (91.08 crore received in Sep24 and balance Rs.84.72 crore receivable on warrants conversion by Mar26). With the fund raise, net worth increased from Rs.168.85 crore as of Mar24 to Rs.260.72 crore as of Mar25. With the capital infusion, debt to equity ratio improved to 2.44 times as on March 31, 2025 compared to 2.63 as on March 31,2024.

On the debt funding side, marginal cost of funds continues to decline and funding mix is becoming more diversified. During FY 2024-25, the company improved its funding profile by raising debt through non-convertible debentures (NCDs) issuances. As of March 31, 2025, Moneyboxx had support from 33 active lenders, including 12 banks.

	31 March 2023	31 March 2024	31 March 2025
Total No. of lenders	25	32	33
Marginal Cost of fund	14.1%	13.2%	12.3%
Total Debt ( crore)	238	444	636
% Debt from banks	24.0%	30.0%	28.4%
% Debt from NCDs	8.5%	17.9%	34.2%
% Debt from Securitisation	-	11.0%	2.9%
% Debt from NBFCS/FIs/others	67.5%	41.1%	34.5%

Effective liquidity and asset-liability management

The Company takes a prudent approach to liquidity management, ensuring a stable financial position. As of March 31, 2025, the Company maintained positive cumulative mismatch across time buckets and had sufficient liquidity to meet its financial obligations. The Company secures funds at both fixed and floating rates while providing loans at fixed rates and regularly reviews its lending rates based on market trends, funding costs and competitive conditions.

Human resources

Moneyboxx values its employees as key stakeholders in the Companys success and is committed to creating a supportive and engaging work environment. Moneyboxx has implemented various initiatives to improve employee retention and growth, such as internal publications, performance updates, feedback surveys, training programs, career advancement opportunities and engagement activities.

Companys headcount increased significantly during the year driven by expansion of operations. Workforce increased from 1,300 employees as on March 31, 2024 to 2,003 employees as on March 31, 2025. The Company follows the principle of Rs.One Team, One Dream, highlighting the importance of every employees contribution, regardless of role or designation. Moneyboxx creates an inclusive and supportive workplace by embracing diversity and encouraging different perspectives, ideas and experiences, ensuring everyone feels valued.

Internal controls and its adequacy

Moneyboxx has established strong internal controls and standardised operational procedures to protect assets and improve business efficiency. The Company has put in place through internal control measures tailored to its size, operations and complexity.The management regularly monitors controls across different processes and takes corrective actions to address any discrepancies in business activities.The Internal Audit function provides reasonable assurance on the effectiveness of operations, the accuracy of financial records and reports and compliance with relevant laws and regulations. The Audit Committee conducts a detailed review of the internal control system, incorporating feedback from both external and internal auditors.

Risk management

Moneyboxx has a comprehensive risk management framework to identify and address various operational risks.The Company actively manages credit risk through a structured approach, covering every stage from loan application to disbursement and collection. Being in the lending business, the Company is exposed to multiple risks such as Credit Risk, Operational Risk, IT Risk, Financial Risk, Compliance Risk etc. The Company ensures to recognize these risks at regular intervals and formulate an adequate risk management strategy.

Key aspects of the risk management framework include:

• Effective Credit Underwriting: Leveraging non-traditional and non-financial alternative data, along with sector-specific insights, to strengthen the credit assessment process.

• Strong Risk and Compliance Culture: Ensuring a risk- aware environment that aligns with the Companys growth plans while maintaining strict compliance.

• Diversified Growth Strategy: Expanding across multiple sectors and regions to reduce concentration risk and enhance overall stability.

The Companys Risk Management Policy covers the identification, assessment and control of various risks, ensuring that these risks are managed proactively and effectively. In line with new scale- based regulations, Moneyboxx has also set up a Risk Management Committee responsible for developing, implementing and periodically reviewing the Companys risk management plan.

Cautionary statement

This document contains some statements about expected future events, financial and operating results of Moneyboxx Limited, which are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that the assumptions, predictions and other forward-looking statements may not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as several factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statement.