UGRO Capital Limited (511742) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Ugro Capital's Q2 FY '21 Earnings Call. We have with us the senior management from Ugro Capital, including Mr. Shachindra Nath, Chairman and MD; Mr. Sandeep Zanvar, CFO; and Vivek Seshadri, Strategy Head. Some of the statements made in today's call may be forward-looking in nature and are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs and assumptions based on currently available information. Audiences are cautioned not to place undue reliance on these forward-looking statements in making their investment decisions. I now hand over to Mr. Shachindra Nath for his opening remarks and key highlights for the quarter, post which we can open the floor for questions. Over to you, sir.

Thank you. Good morning, everyone. And many thanks from all of us at Ugro for joining us for our quarter 2 FY '21 earnings call. As MSME have started resuming their operation across the country, we do have seen our lending to revert as close to normal as it is possible given the coronavirus situation. While we remain highly vigilant about the portfolio quality in these turbulent times, we also see the great opportunity in front of us. Fundamentally, strong Indian MSME requires capital backing now more than ever. And we are determined to answer their call and to expand our reach so that we can satisfy the requirement of maximum number of MSMEs. Our mission statement is to solve India's MSME credit gap, and we have been working tirelessly in this coronavirus period to develop new product and distribution strategies. The major theme for this is expanding our target demographic to focus keenly on micro enterprises. These bottom-of-the-pyramid firms provide livelihoods and employment to millions across the country and present a real pathway for impoverishment to beat the poverty track. We will be capturing to these micro enterprises, primarily through our new Saathi program and launch of our direct distribution branches in quarter 3. Saathi refers to our range of secured micro-enterprises loans, which are smaller ticket, higher yield and shorter tenure than our traditional secured loans. We launched this program in October, and it has already seen great traction as the market demand for such micro-enterprises loan is self-evident. Our direct distribution branches will be opening across 5 states in December. And unlike our intermediated distribution in our existing branches, these branches will feature Ugro sales personnel originating loans. These branches will be spread across Tier 2 and Tier 3 semi-urban location and will thus allow us to greatly expand our potential customer base without cannibalizing any of our existing business lines. In terms of our existing distribution, we have further expanded our group partner network to 518, which is a 32% increase on the quarter 1 figure. Our short-term emphasis is on disbursing via our Sanjeevani program and ECLGS as these represent the highest value proposition at this time. Till date, we have already disbursed over INR 100 crores through Sanjeevani and over INR 35 crores through ECLGS. As a nimble organization, we will always look to pivot to address the most pressing market needs as they arise. Our branch and ecosystem channels have fully reached their pre-COVID levels. And we are in the process of rapidly operationalizing our many corporate partnerships. We have had several of these partnerships go live on our proprietary partnership platform GRO-Xstream, and we are exciting -- excited to fully explore all opportunities to create value alongside our partners. With regard to disbursal numbers, quarter 2 has seen recovery to pre-COVID levels of disbursal despite the many limitation still caused by COVID. We have disbursed approximately INR 300 crores in quarter 2, including INR 116 crores in September, which is on par with our pre-COVID numbers. We fully expect to continue our positive disbursal trajectory beyond our pre-COVID levels as we expand our branch network, introduce new products and flesh out many more partnerships. We have reached a total of INR 1,697 crore disbursal as of end of quarter 2, and our AUM stood at INR 970 crores with a blended yield of 14.4%. Our AUM is spread across 7,734 live customers for a highly granular average ticket size of INR 13 lakhs. Our portfolio remains well diversified by sector and geography, and our book is roughly 2/3 secured. Our portfolio has a GNPA of 1.9% and net NPA of 1.2%, both are -- both of which are reasonable figures as our book has started showing some vintage. We've also maintained our conservative cost when it comes to provisioning. We have increased it to INR 3.8 crores of COVID-19 specific provisioning and INR 11.8 crores of total provisioning, and this has led to our having had a large provisioning expense of INR 3.93 crores in Q2 FY '21. Our portfolio is holding up well from the stress that is to be expected from a black-swan event like COVID. Our collection efficiencies remain high, and we are in close contact with our partners or customers whose business may be seeing stress at these times. We are also looking at opportunities to selectively restructure and would do so wherever prudent. This quarter, we have started to see some early fruits of the strategic and operational improvements that we have been working towards since the start of pandemic. One very exciting development has been that we are one of the first lenders to be integrated on government's GeM-SAHAY platform. GeM-SAHAY is an online end-to-end marketplace for open, efficient and transparent procurement of goods and services by central and state government organizations. Through our integration, we will be gaining access to well over 2 lakh sole proprietorship and vendor ecosystem that supply a total value of nearly INR 20,000 crores. And we expect to see results from this integration from Q3 FY '21 itself. We'll also soon be rolling out a new iteration of our growth chain platform, which we have built as a proprietary supply chain financing platform. On the liability side of things, we have continued to take great strides. The elevation of long-term liquidity crunch that was triggered by IL&FS continues through government-driven schemes as PCG scheme and the TLTRO 2.0. For well-run NBFCs this has been a huge boom as it has allowed us to secure our liquidity position for the foreseeable future while borrowing costs have come down significantly, solidifying margins across the industry. This is an excellent timing for us as we will be able to leverage the large volume of liquidity that are now available to target aggressive growth, both organic and inorganically. As at the end of quarter 2, we had a total of INR 578 crores of sanctioned liability lines, nearly INR 200 crores of which we have yet to draw. Our liability book continues to become yet more diverse. And now we have 16 active lenders, including PSU banks, private sector banks, foreign banks, other financial institutions. We maintain an extremely healthy liquidity position at present with nearly INR 300 crores of immediate liquidity on the balance sheet, not including our undrawn sanctions. This has meant that we have a CAGR of 86%, far higher than industry averages. Our liability pipeline is also very strong for the foreseeable future, and we are confident in significantly expanding our borrowing book as per our needs through the end of FY '21. Our financial performance continues to be strong. We have notably recorded profit throughout this coronavirus period despite our highly conservative approach to provisioning. We have a declared profit after tax of INR 17.18 crores for Q2 with a total income of INR 34.82 crores. Our net worth as of September 30, '20 stood at INR 943.9 crores with our book value per share being roughly around INR 134. In closing, we believe that from a business perspective, the biggest challenge posed by the coronavirus had been successfully dealt with. Despite the continuing disruption, we have proven our adaptability as an organization and reattained our pre-COVID status quo in terms of distribution far sooner than anybody could have reasonably expected. We have spoken at length about our commitment to Indian MSME and our founding vision of solving the unsolved. As Great Mahatma Gandhi had once said, an ounce of practice is worth 1,000 words. We have already added significant value to MSME space through our innovation, and we fully expect that the coming months will see us double and triple down on this impact once Saathi and our direct distribution branches go live. I hope that you will stay with us as we continue our journey. Thank you, and over to you Dolat team for Q&A.

[Operator Instructions] The first question is from the line of Dinesh Kotecha from KRIC.

Good morning to all of you. Mr. Chairman, Shachindra Nath and the entire team. Sir, my question relates to only 2 things, sir. Number one is that if you come to Slide #11. We have added some 5 corporate clients. I mean I would like to know, basically, I mean, what is the commitment amount and what is the mean and the max amount by the corporate clients at your end. Also, we have reduced the ecosystem partners, have gone down by 2. Now any specific rationale for why that ecosystem partners have reduced? Any hitch between the eco partners, I would like to know that? Sir, I would like to know the delinquent amount's accounts in the quarter 2 because 391 customers have been added, any customer who has not paid a single paisa. And other than that, for whatever efforts you are taking to set up which was offset in the first quarter, you are again setting it up in a proper manner in the second quarter onwards. I think things seem to be improving. Results are good. The provision as a deferred tax provision has added to the profit, I'm happy about it. And the only thing is the moratorium was what was set up by you for the clients and all that, I mean how well is restructured or is there any changes to that moratorium period and amount and all that. Can you please explain a little bit so that more severity will be appreciated?

Can you ask some specific questions because there are many questions around that? So if I understand, so let me answer whatever I understood from the question. The ecosystem partners represent supply chain financing business. In our supply chain financing business these are the partners through whom we finance the vendor, distributor, dealer ecosystem. And during this period, we have gone on a process of complete digitization wherein we pick up the data from GST and banking, and in that process, some of our anchors partners have decided not to participate and provide the data as per our underwriting norms. And those partners have exited. In terms of a few questions around moratorium and restructuring. As we have said in our opening commentary, as a way, we have not restructured much of an amount. You can see in our financial disclosures we have restructured total roughly around INR 7 crores worth of loans. But as you know that pandemics and its impact is an ongoing impact. And wherever there is a request from a customer, there is a completely credit exercise, which we do. And philosophically, wherein we think that there is a need for a customer to reduce cash flow, we have to match up EMIs, we do it accordingly. We first try, we just make sure that the restructuring is not used for purposes of deferring the loan for businesses which are not in revival mode. So that broadly is the commentary, anything else specifically?

Yes. So I just want to add to that, corporateness for us is not limited to the partners. It's essentially an origination channel for us, a partnership-based origination channel wherein which is essentially broken down into 3 parts. One is partnering with other NBFCs to co-lend through their channels. Two is partnering with manufacturers so that you can provide something for their end customers. Three is partnering with B2B aggregators, fintechs of the world to cater to their ecosystem, right? So this is not a typical corporate lending that we are doing. This is essentially a channel for us, wherein we are catering to the MSME and MSME customer, it's a B2B2C customer channel. So there is no specificity, because each of those cases are evaluated in its own merits, right.

Sir, one more question to be added that do we do also provide finances to professionals and then like doctors and chartered accountants? Do we have that channel?

We are focused on our 8 specified sectors, within that 8 sectors, health care is one of the sectors. And within those 8 sectors, we do roughly around 75 to 100 subsector, and we look at the ecosystem around that. So we do provide financing to the doctors, but they are specified to certain segment of the doctors, so we do for dentists, we do for IVF clinics, so on and so forth.

We don't provide loans to chartered accounts as a segment for now.

Thank you very much because I appreciate the efforts which you and your team has undertaken in the second quarter. And I hope that this goes on increasingly to show better performance in the Q3 and Q4.

The next question is from the line of Jainis Chheda from Dimensional Securities.

There are a few questions. One, you said about your partner network and corporate partners where you do the core lending and all. So I just wanted to know what are the key terms in those contracts, like how you do the revenue sharing and who bears the risks? Secondly, you have 9 branches and 194 employees. So what are the number of employees per branch?

So -- sorry, do you want to ...

No, go ahead.

So you need to look at that set of employees between broken down into corporate and broken down into branch, right? Okay. First, break it down into sales and then break it down into non sales. So if you look at it, of the 180-odd employees around 60 to 70 will be sales, of which each of our branches will have around -- all the 9 branches have around 45 employees. The remaining are the business development team for our partnership-led alliances, for our ecosystem-based lending, so on and so forth. So each of the branch will have currently around 5 to 6 people in sales.

Okay. So rest of them are the HR employees or they...

No. So then there are -- so branch led is only one of the channels for us. There are 3 other channels that we operate in, one is the cost system lending channel, which is our supply chain wherein we cater to vendors, dealers, distributors of mid-corporates. So there is a team, the sales team dedicated to that. Then there is a partnership-based distribution channel that we have. As I mentioned before, we cater to large manufacturing -- sorry, large machinery manufacturers to cater to their end customers, fintech companies who cater to their MSME clients. For instance, if there's a payment gateway and there is merchants on that payment gateway, we cater to them. So the third team is for those kind of lines. So the total sales team will be around 70 to 80 of which 45 are branch sales team.

Okay. And in terms of your terms with your network partners and your corporate partners, who -- what are the revenue sharing and the key risk, like who...

It varies, It varies.

It varies. So if you look at what we call a channel, it's called partnership and alliances. Now in partnership and alliances, there is a very small NBFC with whom we are co-lending. So we don't lend to NBFC, we only co-lend with them or if there is a payment of the network or if there is a fintech. They each would be varying depending upon. So the role and responsibility we expect the partner to do origination, do customer service, and collections. And depending upon they apply our risk framework and sometimes we do the assessment of their risk framework. So it depends upon what kind of risk sharing arrangement is there. And what is the role and responsibility and it accordingly varies. So there is no uniform way if I can give it to you.

Yes. So I mean there are 2 broad metrics, if you will. One will be if the -- the partners are involved only in disbursal wherein there's a percentage of the disbursal amount that he gets, which varies depending on the type of loan that he has. And then suppose he is participating in the risk as well, which is essentially giving us a first loss cover then there is a certain interest sharing also that we do if that breaks. So there are 2 broad types of partnership payouts, but then getting into the specifics of each would mean going down into each of our 4 distribution channels and there are 5 variants in each of those distribution channels as well.

[Operator Instructions] The next question is from the line of [Vikram Rana], an individual investor.

Congratulations on a good quarter considering the current market environment. So just quick 2, 3 questions what I had on the mind looking at the presentation. One is with respect to the quality of the loan book. Now that the book is suddenly becoming vintage, the NPA's have increased, the gross NPA's specifically have increased from close to 1% to 1.9%. So could you please throw some light on that about the increase in the gross NPAs?

So as you rightly said that book is now showing some vintage. And obviously, the period has been very, very turbulent. We think so this is coming to the normalcy curve. Our general belief is that and what we are seeing in the portfolio in terms of collection efficiency, how our customer responding, amount of emergency credit line availed by them and the moratorium data, and that our portfolio is quite resilient at this point in time. We are not seeing any surprises from where we are today.

A lot of it is due to COVID as well, wherein there are temporary delays in cash flows, and therefore, you will see delinquencies going up a little. But the fundamental thing to note is a large percentage of our portfolio is secured in nature. We are working with these customers. These customers are slowly getting back to normal, for instance, just take a school, for example, right? All those schools are functioning right now, the amount of venue that they're collecting has come down a lot because they are not collecting on any of the ancillary revenue, if you will, right, which is transportation, which is books, uniforms, where the margins were larger. So we are in touch with each of our customers. We understand why each of them is struggling right now. And based on that, if there are customers we believe need that support, we will provide them the support during this period of time.

Sure. I think that was pretty comprehensive. And another thing what I wanted to ask is basically, I think you also mentioned in your presentation that the GRO-Xstream is something which has now become operational with multiple fintechs and partners. And I believe that is for the coorigination part of the business, right? And now given that pre-COVID, we have signed about 3 coorigination pacts with the bank, has that started off now?

So our GRO-Xstream, so just to give you we have 5 platforms which we operate. So Group Protect is our central platform. So we don't fashion ourselves saying we are a fintech, but because that term is not well understood, but our entire business is all about the digitalization and technology at the center of it. And our rule engine on the underwriting is supported by 4 different products. One is GRO-Line, which is our supply chain platform; GRO-Plus, which is our intermediation platform; GRO-Direct, and GRO-Xstream. GRO-Xstream has both elements so it is an upward and downward co-lending model. On the upward side, we have 3 banks -- 4 actually, 3 banks and 1 NBFC, which is already -- 3 of them have been signed a partnership and one is getting integrated now, which is Bank of Baroda, ICICI, Kotak and Poonawalla Finance. So all of them are already there. And on the downward stream side, obviously, there are many number of fintech NBFC partners are coming. We -- as you -- all of us probably know that the co-lending, which the RBI and the banks are very keen that, that should start in India, have been facing operational challenges for quite some time. Last week RBI has revised the guideline on co-lending, and we are very hopeful that under the revised guideline, which is like an on-tap direct assignment, some of these banks would become functional. It's also a function that we have enough and more liquidity for ourselves to lend out of our own balance sheet itself. But it's still, from a long-term strategic perspective, we would like some of these partnerships to become active now.

Right. Sir, just one last thing. As you mentioned, right, during the opening statement also that the cost of borrowing now started coming down. So I just wanted to understand what will be an incremental cost of borrowing looking at a weighted average close to about 10.5%?

So the way, sir, you should look at it is that the current cost of borrowing is also a function of lot of liquidity measure, which has been used by RBI as well as government of India, right? So majority of the new -- the benefit of that, that pre-COVID, we didn't had a single public sector bank or a large private sector bank as a financier to us. But during the COVID period because of our strong balance sheet and quality of portfolio of governance management, we saw all of these lenders to come to us. So today, we have around 7 public sector banks, 2 large private sector banks, multiple small finance banks and foreign banks are already there. So the current cost of borrowing, which you see on the balance sheet is a function of this excessive liquidity, which has been provided. We don't know whether that would be the rate going forward. But what we are seeing is that there is enough and more liquidity for good companies, and we will continue to draw liquidity for our current year's need, and we don't see a challenge. And it should be in the same, more or less same range is that what's our target is.

Right. And sir, one last question, if I can squeeze in. Just to end up, so what is your target now for FY '21, looking at things have started going back to pre-COVID levels to an extent. So maybe anything on that front? And how do we actually plan to reach that number?

So we don't give any hard numbers, I think so, but you can draw ...

Some ballpark something there.

Absolutely. So what you should look at is that we have said in our opening commentary that we are not showing too much of exuberance given where the markets are and underlying SME customers, are still quite distressed. But the run rate disbursement, which we are seeing, we will definitely maintain that disbursement and there should be at least some 10% to 20% incremental disbursable rate should come during this year.

Sure, sir. And wishing the whole team, happy Diwali.

The next question is from the line of [ Gauri Ahuja ], an Individual Investor.

So as you are lending out to 8 different sectors, I wanted to understand that what is the current exposure to all of these sectors, especially like hospitality and education that are stressed right now? How will you kind of mitigate that risk? And are there certain sectors that are actually using a higher level of moratorium coverage and certainly witness more restructuring going forward?

No, I -- so okay. If you look at our -- it is given in our presentation, our sectoral exposure is more -- it's quite well diversified. Education consists of 19%, light engineering is 21%, electrical equipment is 14%, hospitality is 13%. So your specification to hospitality, so in hospitality we finance multiple subsectors in hospitality, fast food chains, restaurants, small dine-ins, so on and so forth. We expect 1 or 2 odd cases of Banquet Hall so and so forth. We are -- obviously, there is a reduced cash flow in hospitality, but majority of our portfolio remaining secured and some of these customers have enjoyed the emergency credit line facilities. We don't see much of a problem, but we are cautious. In terms of our incremental disbursements, we are very cautious with respect to hospitality, but our existing portfolio looks fine as of today.

Okay, and any plans on expanding to lending in all of these 8 sectors going forward?

Sorry, what is the question?

Sorry, I just asked a follow-up on that. What is the chance to expand lending in all of these 8 sectors going forward?

We are, right? So we have started disbursement back. So -- as we have said that auto component around 6, 4, 5 quarters back, we have gone is very, very slow. Hospitality, we are very slow. On a long-term basis, I think in the post-COVID we are still positive on each of these sectors, and you cannot generalize. As I said, in hospitality, a banquet hall today is more suffering than a fast food chain, right, which they are doing home delivery. Same way in auto component, 4 wheelers are still little stressed, but 2-wheelers are doing fine. And we -- as you know, we do the bottom-of-the-pyramid of that. So we continue to disburse across our sectors. And a sector which definition, which we have added is what we call micro lending sector, wherein the sub INR 15 lakhs of loan we don't think so that there is a homogeneous effect of a sectoral impact. And then we treat that as a separate sector. So a program like Saathi and our direct distribution is designed for micro-lending segment, and we continue to grow in all of them.

Okay. Sir, right, that answers it. So sir, a few last things, just wanted to see like since you've expanded to Saathi and your direct channels as well, congratulations on that. How are you adapting to new customers right now? Like what is the strategy behind it?

One of the competitive advantage Ugro has is its centralized technology, proprietary technology platform and data analytics. Unlike other conventional traditional lenders, when they enter into micro-lending segment, they continue to start from a pure physical footprint of branch, which we will also have, but they don't have the data analytical capability to benefit from what we have done. So when we started in our prime segment, we invested heavily in our tech platform, and those platforms are now being customized to look at micro-lending. And obviously, there is a resetting of the underwriting parameters because our prime segment underwriting was largely bureau-driven, and we have customized bureau data to a sector bureau's proprietary score called GRO score. And then we have GRO expert which is subsector operational scorecard. So using combination all of that and using this into an underwriting tariff filter, which fits into Saathi and our direct distribution program.

Sure. Just one last thing. We understand you have different distribution channels around 3 to 4. What are the spreads that you're enjoying in all of these, just for my knowledge?

So we don't do spread by channel. We do spread by product, we have given in our presentation, you can see our gross yield across secured and secure supply chain. And that should be the best way to look at it.

Yes. And let me just again shed some incremental light on that. So the way you should look at it is we buy channel and buy product within those channels. If you look at our channel again, that's broken down into 2 parts, the branches that we have in Tier 1 cities, which are the 9 branches that we have right now and the direct brand that we are opening up in Tier 3, Tier 4 kind of cities. In that the Tier 1 cities will obviously be fewer, so we secure at 12%, 12.5% and unsecured at around 18%, 19%. Whereas in the Tier 3, Tier 4 cities, the secured and the unsecured are 20 plus, right? So the spec you can backward calculate from there. On the ecosystem channel, again no clutch there, vendor side financing is at 13%, 13.5% and dealer distributor would be around 15.5%, 16%. Then you go to your partnership-led strategy there. There, I think the rates are very different depending on the risk participation from the partner side as well. For instance, he is giving me x-percent of first loss and obviously, I'm able to bring down the rates to that effect. And if there is no first loss, then obviously, the rates are 18% to 20-odd-percent. Then the last one is the digital channel where in the rates are again 20% plus, but that channel for us is currently on pause given COVID.

Right. Thank you so much to both of you, and happy Deepavali.

The next question is from the line of Shanay Kothari, an Individual Investor.

So as your AUM is around INR 950 crores, INR 960 crores. So how much of that is still in moratorium? And what percentage of that has till not paid a single installment basically? And what do you expect like going forward, how much of that book will go bad?

So let me take that. Yes, let me take that. In the first moratorium, I'll just answer that question because I don't have the exact data point, but I think you'll get the answer with this one. The first moratorium, 33-odd percent in moratorium, which was out for us. The second one was an opt-in wherein the 61% to 62%. September and October have been no moratorium month and almost the collection efficiency has been 90% to 95% plus, right? So there are very very little customers who have not paid a single EMI. It will be less than 1%, 2%.

All right. And going forward, how much of the -- how much of that book do you expect to go back?

Sorry, Vivek, as we said in our statement as well that the COVID-related provisioning, which we have done, what we look at data today seems to be more than sufficient for covering any form of -- so obviously, some of our customers would undergo restructuring. As of today, what we have said that during this quarter, we have restructured roughly around INR 7 crore worth of outstanding loans and restructuring does not mean that the customers have gone bad. These are the customers whose cash flow have got reduced and we have just adjusted for their cash flow and either increased the tenure or reduce their EMI. And we think so that process would continue until March '21. But we don't expect that our total outstanding portfolio, which will go through the restructuring would be more than 6% to 7% of our outstanding pause as of September. And the provisioning required for that would be sufficient vis-a-vis our COVID provisioning.

Yes. And the other thing to note about the restructuring that we are doing is we are not offering anybody a moratorium if you will. What we are trying to do is make sure that the customers are paying so that the habit maintains. But then if the EMI's were fixed, maybe they're paying 0.75 extra of EMI. So that's the only change that we bringing to our portfolio.

[Operator Instructions] The next question is from the line of Mona Khetan from Dolat Capital.

Sir, on this unsecured portfolio, which is about 1/3 of your loans, could you throw some light as to how you manage risks in this book? And are we incrementally also lending to this sector?

So look, our unsecured business is a combination of many things. When we look at MSME customers across our different distribution channel, we do both secured and unsecured kind of finances. All our loans, whether they are secured or unsecured is based under underlying cash flow. The assessment of cash flow, most of our unsecured business is for prime customers wherein we test -- at a filtration level, we filter these customers on bureau. Then this gets tested on our proprietary scorecard, which is in a modification of bureau by sector. And then it is done -- cash flow underwriting is done by underwriting teams using our data analytics tool and the underwriting method. And that is the reason that why our portfolio has shown the same level of resilience [indiscernible] sometimes better than that.

Portfolio collection efficiencies were more than 95%, if I am not wrong?

Yes. Second, in terms of whether we are incrementally doing that, the answer is yes. We have not stopped lines of secured and unsecured, but we also [indiscernible] digital mortgages and commercial mortgages, we're also starting machine-related mortgages, so on and so forth. And given the current time, we are trying to restrict the unsecured whole disbursement across our total disbursement pool, but it is not that [indiscernible].

Okay. And will it be fair to say that the gross NPA levels are similar across both secured and unsecured book?

I would presume that the unsecured is lesser. Vivek, is that right?

So in fact, the -- most of the delinquencies that you see is just like we are confident that we'll be able to easily make it up in the partnership led channel and the ecosystems in the channels, a lot of whom have FLDs and those kind of protections as well, right? So in our traditional secured, unsecured channel, the delinquency almost next [indiscernible].