Announcing plans to raise up to $10 million capital by March, payments player Suvidhaa Infoserve today said it is targeting to diversify into lending space and would be keen to apply for a Small Finance Bank licence once it is opened up.
Interestingly, the city-based company was one of the Payments Bank aspirants.
“We want to start lending on our own by end of March, for which we will turn into an NBFC, and will eventually apply for Small Finance Bank licence in around two years, once RBI opens it up on tap,” its founder and chairman Paresh Rajde told reporters on sidelines of an event here.
Given its network of over 90,000 outlets, most of them serving the urban poor with remittances, bill payments, insurance premium collections and rail bookings, it will target the microlending space, he said.
Notably, most of the ten entities which have received in-principle approval to start SFBs are microlenders.
He said the company, which had last raised money in 2011, has embarked on a drive to raise USD 10 million in a fresh capital infusion and is in talks with investors.
Its existing investors include World Bank Group member IFC, Norwest Partners and industrialist Shapoorji Pallonji, who is an angel investor, Rajde said.
Rajde said the $10 million may be raised either from existing investors or some new investors may also come on board.
He, however, sought to clarify that the money is for business expansion and not particularly aimed to be invested in the lending activities that it is planning to embark on.
It had tied up with private sector lender Axis Bank to do microlending, Rajde said, adding that the loans will be on the bank’s books.
He said the company will be launching more such tie-ups and building on its experience in lending before starting to take loans on its own books, it will have to start a non banking financial company.