money masters leasing finance ltd share price Management discussions

A. Indian NBFCs:

Money Masters Leasing & Finance Limited, or ‘the Company) is a Non-deposit-taking Non-Banking Financial Company (NBFC-AFC) registered with the Reserve Bank of India (RBI). It is classified as an NBFC-Asset Finance Companies (NBFC-AFC) with the RBI. It is engaged in the business of lending, and acceptance of deposits. The Company has a diversified lending portfolio across retail, SMEs and commercial customers with significant presence in urban and rural India. It accepts public and corporate deposits and offers variety of financial services products to its customers.

B. Industry Overview

As on 2023, the size of the NBFC sector is estimated to be around USD 326 billion. This is driven by rising demand for niche financial services provided by non-bank lenders, such as micro lending and small business financing.NBFCs have grown in importance in India over the past few years, becoming an important source of credit for businesses and consumers alike. Most NBFCs operate in lending, leasing, hire-purchase activities, and other allied financial services. Some of them also specialize in money transfer services, foreign exchange services, stockbroking and debt collection.

The NBFC industry in India is growing at an exponential rate with its impact becoming more visible across different sectors. As on 2023, the size of the NBFC sector is estimated to be around USD 326 billion. This is driven by rising demand for niche financial services provided by non-bank lenders, such as micro lending and small business financing. The growth of the NBFC sector can be attributed to two key factors:

1. The demand for loans by the MSME (Micro, Small and Medium Enterprises) sector who finds it difficult to borrow from banks due to stringent eligibility criteria.

2. The increasing number of digital lenders offering alternative financing options to traditional banking institutions.

With more NBFCs entering the market, competition has also increased in terms of pricing and loan offerings. This has further spurred the growth of non-banking finance companies providing innovative products at affordable prices.

The NBFC-Retail asset under management (AUM), estimated at around 14 lakh crore as of March 2023, is expected to grow at a higher pace of 18-20% in FY24 vis-?-vis the previously estimated level of 12-14%, as growth in the unsecured loans segment, consisting of personal & consumption loans, unsecured small enterprise.

C. Performance Review:

The Company is engaged in the business of Hire-purchase finance. The net receipts from Operations during the year under review were Rs. 233.46 lacs as against Rs. 238.79 lacs in the previous year. The Profit after tax is Rs.48.88 lacs as against Rs.41.59 lacs in the previous year.

D. Risk Factors:

Financial Risks for the market are associated with price fluctuation and volatility. Risk factors consist of interest rates, foreign currency exchange rates, commodity and stock prices, and through their non-stop fluctuations, it produces a change in the price of the financial instrument.

As the economic slowdown and rising interest rates impacted NBFCs, regulatory changes such as fiscal, monetary policies, RBI restrictions have emerged as major areas of concern. Small &mid-size NBFC also faces liquidity crunch, because lack of refinance facilities and cost of funds.

E. Opportunities and Threats:

The increasing demand for credit in the Indian market and the adoption of digital technologies provide significant opportunities for NBFCs to grow and expand their offerings. However, to remain on the top, NBFCs need to be agile, innovative, and adopt new technologies to enhance customer experience and mitigate risks.

F. Outlook:

With the ongoing stress in the public sector banks due to mounting bad debt, their appetite to lend (especially in rural areas) is only going to deteriorate, thereby providing NBFCs with the opportunity to increase their presence. Additionally, improving macroeconomic conditions, higher credit penetration, increased consumption and disruptive digital trends will allow NBFCs credit to grow at a healthy rate of 7 10% (real growth rate) 3 over the next five years.

The NBFC segment is a catalyst to the economic development of the country. The RBI is constantly striving to bring necessary changes in the NBFC regulatory space to proactively provide regulatory support to the segment and also to ensure financial stability in the long run.

G. Segment Wise or Product Wise Performance:

The company operates in only one segment i.e. Leasing and Finance. The company is mainly into Hire Purchase activity. Financing on HP basis auto rickshaw, Computers, Equipment etc.

H. Internal Control System and their Adequacy:

Your Company has adequate internal control system commensurate with the size and nature of its business.

I. Discussion and Financial performance with respect to operational performance:

The details of the financial performance of the Company are appearing in the Balance Sheet, Profit & Loss Account and other financial statements appearing separately. Please refer the Directors Report for highlights.

J. Material Developments in Human Resources/ Industrial Relations Front:

We would like to intimate you that the process of postal ballot for obtaining approval of shareholder for migration of listing status of company from BSE SME Platform to Main Board of BSE is completed and same has been approved under postal ballot Meeting of shareholders.

The company recognizes the importance of key role played by the people and maintains a cordial and harmonious relationship with its employees. The productivity of staff of the Company has been satisfactory.

Cautionary Statement:

Statements in the Management Discussion and Analysis and the annual report describing the Companys objectives, projections, estimates, expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations in India and other countries. Actual results could defer materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting the domestic market, in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors and unforeseen circumstances.

	On behalf of Board of Directors
	Money Masters Leasing and Finance Limited
	Hozef Darukhanawala
	Managing Director
Place: Mumbai	DIN: 00177029
Date: 4th September, 2023