SMC Investor Presentation

NBFC Industry Outlook MSME Credit Market - India • . • • Non-Banking Finance Companies (NBFCs) have played an important role in the Indian financial system by complementing and competing with banks, and by bringing in efficiency and diversity into financial intermediation. NBFCs have evolved considerably in terms of operations, heterogeneity, asset quality and profitability, and regulatory architecture. Going forward, the growing systemic importance and interconnectedness of this sector calls for regulatory vigil. The regulatory approach of the Reserve Bank has adapted to the increase in complexity of the entities within the NBFC sector as well as the growing significance of NBFCs within the financial sector. The number of registered MSMEs has grown to 63 Mn units in 2021 at a growth rate of 18.5% from the previous year with the launch of Udyog Aadhaar Memorandum policy promoting business activities in the country. India has a large unmet SME credit as less than 20% of these SMEs have access to credit facilities which brings the potential addressable market of INR 19.4 Tn under this credit gap. Availability of good credit borrowers supported with rising income levels as demand is being fuelled by economic growth. Government polices like "Atmanirbhar Bharat", and "Make in India" promote the facilitating of credit to MSME organizations for which the market is growing at a rate of 12% year on year. Market Size: INR 70+ Tn Investor Presentation Sources: SIDBI, IBEF 25% 47% smc Moneywise. Be wise. 28% Credit Gap: INR 19+ Tn Banks & NBFC Credit Gap Informal Channels 30 30

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