Moneyboxx Finance Limited: A Strategic Pivot Towards Secured Lending and Digital Growth

Moneyboxx Finance Limited, a prominent NBFC empowering MSMEs in semi-urban and rural India, has unveiled its Q2 FY26 performance, highlighting a significant strategic transformation. The company is actively shifting its focus towards secured lending and leveraging technology to enhance its operational efficiency and asset quality. This quarter's results reflect a deliberate recalibration of its business model, aiming for sustainable long-term growth and improved profitability.

For Q2 FY26, Moneyboxx Finance reported a total income of INR 55.06 crore, an 11.08% increase year-on-year from INR 49.57 crore in Q2 FY25. However, profit after tax (PAT) for the quarter stood at INR 0.28 crore, a notable dip from INR 2.03 crore in the corresponding period last year. This decline is attributed primarily to muted disbursements and higher credit costs. Despite this, the company's Assets Under Management (AUM) grew by 16% year-on-year, reaching INR 892 crore as of September 30, 2025, even after an ARC transaction. Disbursements for the quarter were INR 115 crore.

Strategic Transformation and Operational Highlights

The core of Moneyboxx's strategy revolves around a robust business transformation towards secured lending. Secured disbursements now constitute 69% of total disbursements in Q2 FY26, a substantial increase from 43% in Q2 FY25. The secured loan book has grown to represent 55% of the total AUM as of September 2025, up from 32% in September 2024, with a target to reach 70% by March 2026. This shift is designed to ensure more stable asset quality, strengthen risk mitigation, and reduce default rates.

Another key aspect of their strategy is focusing on the upper tier of the micro-enterprise segment. The company is targeting customers with average ticket sizes of INR 5-10 lakhs and a credit bureau score of 650+. This focus has led to 72% of Q2 FY26 disbursements going to customers with credit scores above 650, compared to 50% last year. Furthermore, Moneyboxx is diversifying its portfolio away from livestock-based loans, with their share decreasing to 37% in Q2 FY26 from 61% in Q2 FY25, moving towards non-livestock and non-MFI customers.

Technology is at the forefront of Moneyboxx's operational enhancements. The company is leveraging Machine Learning (ML) and Artificial Intelligence (AI) for underwriting, alongside digital processes and mobile applications for sourcing and collection. A notable innovation is the launch of their proprietary Cattle AI solution in March 2025, which automates cattle verification for secure gold lending, improving accuracy and strengthening risk controls.

Here's a financial summary of Moneyboxx Finance Limited:

Financial Position and Outlook

Moneyboxx maintains a strong financial position, with a Capital to Risk-weighted Assets Ratio (CRAR) of 27.1%. This is supported by an equity raise of INR 175.8 crore in FY25, with INR 91.1 crore already received and the balance INR 84.7 crore expected by March 2026. The company also announced a 1:1 bonus issue, further strengthening its capital base and rewarding shareholders. The liability mix is well-diversified, with 43% from the debt capital market and strong support from 30 lenders, including 11 leading banks.

Asset quality, while showing a slight increase in on-book Gross NPA to 3.26% and Net NPA to 1.66% in Q2 FY26, is expected to improve as slippages normalize in the coming quarters, aided by an ARC transaction and a strengthened collection team. The management is targeting to bring operating expenses down below 10% over the next two years and expects the cost of funds to decline to single digits, driven by a positive regulatory environment, improved credit rating, and increased scale of operations.

Concluding Thoughts: Building a Resilient Future

Moneyboxx Finance Limited is clearly focused on building a more resilient and balanced business model. The strategic shift to secured lending, coupled with a focus on higher-quality customers and technological advancements, positions the company for sustainable growth. While the dip in PAT for Q2 FY26 reflects the ongoing credit cycle and strategic adjustments, the underlying initiatives to improve asset quality, reduce costs, and diversify funding sources are strong indicators of a forward-looking approach. The management's commitment to achieving 25-30% year-on-year AUM growth and improving operational efficiencies underscores its vision for Moneyboxx to be a leading player in empowering micro-entrepreneurs across India.