Moneyboxx Finance Ltd has announced a strategic partnership with Water.org, aimed at enhancing Water, Sanitation, and Hygiene (WASH) financing in India. This collaboration marks a significant step towards creating affordable financing options specifically tailored for micro and small enterprises in the WASH sector.

Key Highlights of the Partnership

Implications for Small Enterprises

The partnership between Moneyboxx Finance and Water.org is set to have a significant impact on the WASH sector in India, particularly for micro and small enterprises. By focusing on creating affordable financing options, this collaboration aims to address the funding challenges often faced by smaller businesses operating in the water, sanitation, and hygiene space.

Water.org's Contribution

As part of this initiative, Water.org will play a crucial role in enhancing Moneyboxx Finance's capabilities. The international non-profit organization will provide:

• Technical support in product development
• Training to strengthen financing solutions

This expertise from Water.org is expected to enable Moneyboxx Finance to design and implement more effective and tailored financial products for the WASH sector.

Potential Impact

The partnership between Moneyboxx Finance and Water.org has the potential to:

• Improve access to finance for small WASH enterprises
• Encourage innovation in the WASH sector
• Contribute to better water and sanitation infrastructure in India
• Support the growth of micro and small enterprises in the WASH industry

As this collaboration unfolds, it will be interesting to observe its impact on both the financial landscape for small enterprises and the overall improvement in water, sanitation, and hygiene facilities across India.

Moneyboxx Finance Limited has successfully executed a strategic transaction to transfer its stressed loan portfolio to an Asset Reconstruction Company (ARC), resulting in substantial improvements in its asset quality metrics and collection efficiency.

ARC Transaction Details

The company transferred non-performing assets (NPAs) and written-off accounts amounting to ₹60.90 crores to an ARC trust. In return, Security Receipts (SRs) were issued in a 15:85 ratio, effective from June 30, 2025. This transaction, approved by the Working Committee of the Board of Directors, complies with the guidelines issued by the Reserve Bank of India (RBI).

Significant Improvements in Key Metrics

The ARC transaction has led to remarkable improvements in Moneyboxx Finance's financial health:

The company expects a 40-50% recovery from the ARC pool, with the overall recoverable amount (including interest) exceeding ₹80 crores for the ARC assets.

Strategic Shift Towards Secured Lending

Moneyboxx Finance has been strategically pivoting towards secured lending:

• Secured book increased from 6% in March 2023 to 49% in June 2025
• Target of 65% secured book by March 2026 and 80% by March 2027
• Share of secured lending rose to 64% in Q1 FY26 from 36% in Q1 FY25
• Disbursements to the livestock segment declined to 47% from 64% in the same period last year

Focus on Higher Credit Quality Borrowers

The company has tightened its selection standards:

• Nearly 70% of Q1 FY2026 disbursements went to borrowers with Credit Bureau scores of 650 and above
• 49% of disbursements to borrowers with scores between 650-749
• 20.3% of disbursements to borrowers with scores 750 and above

Strong Capitalization and Liquidity

Moneyboxx Finance maintains a robust financial position:

• Capital Adequacy Ratio (CRAR) of 28.4%
• Net worth of ₹262 crore
• Low debt-to-equity ratio at 2.58 times as of June 30, 2025
• Raised ₹494 crore of term debt during FY25 and ₹127 crore during Q1 FY26
• Received sanction of ₹34 crore from the State Bank of India in August 2025
• Debt pipeline of over ₹500 crore for the second half of FY26

Industry Challenges and Company Response

The microfinance industry faced challenges due to new MFI guardrails capping unsecured borrowing at ₹2 lakh per customer, leading to sector-wide asset quality deterioration. In response, Moneyboxx Finance has:

• Established a dedicated collection department with over 180 team members
• Launched an in-house collections app
• Formed an in-house legal team for rigorous legal recourse
• Strengthened its senior leadership structure with key appointments in Sales, HR, Credit, RCU, IT, and Operations

These strategic initiatives, coupled with the successful ARC transaction, position Moneyboxx Finance to navigate the challenging microfinance landscape while maintaining strong portfolio quality and growth prospects.