[Funding alert] Jaipur-based NBFC Finova Capital raises $15M in Series B funding

The funds raised are expected to be used for geographic expansion, as well as to enable credit to the unbanked population.

25th Mar 2019
  • +0
Share on
close
  • +0
Share on
close
Share on
close

Jaipur-based non-banking finance company (NBFC) Finova Capital said it has raised $15 million in Series B funding from Faering Capital with participation from existing investor Sequoia Capital. According to the company, the funds are expected to be used for geographic expansion, as well as to enable credit to the unbanked population. 


Finova Capital had closed its ongoing $6 million Series A round from Sequoia India in March 2018. 


The team at Finova Capital

Founded in March 2016 by Mohit Sahney and Sunita Sahney, Finova Capital provides mid-ticket loans to MSMEs by giving them access to formal credit. The average ticket size on the platform ranges from Rs 5 lakh to Rs 6 lakh for a time period of seven years.



Also read: Profitable from year one, Finova Capital closes Series A funding from Sequoia India



According to media reports, the company has disbursed loans worth Rs 250 crore across more than 4500 customers. At present, the company has 52 branches in Rajasthan, and plans to take this number to over 75 across Delhi and Madhya Pradesh with this latest funding.


Since the segment that Finova addresses is unbanked, it relies on the borrower’s cash flows to lend. In an earlier interview with YourStory, Mohit had said that the company has created customised templates which are used to analyse credit ratings across each sector. He also said that they have customised templates for different professions ranging from tea vendors to carpenters. He had said,


“A large chunk of India's MSME market falls into the service sector. And this is the segment we cater to - the electricians, plumbers, carpenters, and chaiwallahs, those who don't have access to much-needed capital due to lack of formal documentation, financial literacy, or presence of mid-level players."


The lending segment in India has been attracting attention of both Indian and foreign lenders. Earlier this month, San Francisco-based startup Branch International launched operaions in India, and will look to offer consumer loans from Rs 500 to Rs 50,000 through its Android app to reach first-time borrowers. According to a report by the Omidyar Network and BCG released last year, 40 percent of lending to MSMEs in India still takes place through informal sources.


The report titled ‘Credit disrupted: Digital MSME lending in India’ says that the total MSME credit demand in 2018 in India was pegged at Rs 45 lakh crore, of which Rs 25 lakh crore was met through formal channels with the borrowing done in the entity or proprietor’s name. 

  • +0
Share on
close
  • +0
Share on
close
Share on
close
Report an issue
Authors

Related Tags