On Thursday, SME lending startup, Lendingkart Finance Limited, announced that it has raised $10 million (Rs 67 crore) debt fund from Kotak Mahindra Bank, Aditya Birla Financial Services and other financial institutions.
According to the company, the funds will be used to re-stock their loan book as they reach over 700 cities across the country. This means that the funds raised from this round will be used as lending capital to SMEs.
Stating some numbers, Lendingkart Finance, the non-deposit taking NBFC, said that it has disbursed close to 12000 loans till now across more than 9500 SMEs in 23 diverse sectors.
Speaking on the latest development, Harshvardhan Lunia, CEO and Co-founder, Lendingkart Technologies said,
“We are extremely proud to have partners like Kotak Mahindra Bank, Aditya Birla Financial Services, and others who are enabling us to provide critical working capital to SMEs. All of us recognise that SMEs are the backbone of the economy and if India is to continue to witness high growth, then supporting them is non-negotiable.”
Further, the company states that funds from this round will be used to replenish their loan book and widen their range across the country.
On the other end, Manish Kothari, Senior EVP & Business Head, Corporate Banking, Kotak Mahindra Bank, said,
“We are excited to work with Lendingkart Finance since we believe they have a unique and efficient proposition to finance customers – largely in a space which is not as effectively addressed by most banks.”
While using big data analytics and machine learning algorithms to evaluate its client’s creditworthiness, LendingKart utilises about 5,000 data variables to determine factors like financial health, comparative market performance, social reliability and compliance.
Once, the evaluation process is completed, loan amount is disbursed to the deserving borrower within 72 hours from the time of application. Till date, over 250,000 SMEs have reached out to Lendingkart Finance for their credit requirement, claims the company.
But LendingKart isn’t the only NBFC in this space. It competes with InCred Finance, which claims to have a Rs 100 crore loan book already.
According to the Reserve Bank of India (RBI), this year, NBFC loans have also grown at 16.6 percent, compared to 8.8 percent for the banking sector. InCred has joined the party by disbursing loans worth Rs 100 crore in just two months of its existence.
The Reserve Bank of India’s Financial Stability Report (December 2016) shows a 33.1 percent increase in loan and advances given by deposit-taking NBFCs and a 12.5 percent increase in advances given by the non-deposit-taking NBFCs.