B2B e-commerce start-up Udaan’s digital lending arm UdaanCapital has entered into a partnership with Northern Arc Capital Limited to facilitate disbursal of credit to over 50,000 kiranas and small retailers.
UdaanCapital is owned and operated by Udaan through a subsidiary firm in partnership with IDFC First Bank. The start-up said that UdaanCapital currently facilitates disbursal of over Rs 8,0000 crore of credit per annum to over 150,000 kiranas/small businesses across the country. The credit limits offered range from Rs 10,000 to Rs 25 lakh and the credit tenures offered are short term.
UdaanCapital enables small and medium-sized retailers to make purchases for their stores from a wide array of suppliers on the udaan platform with credit lines provided by its lender partners. Today, more than a third of sales on udaan, India’s largest B2B commerce platform is powered by UdaanCapital, according to a company statement.
The lending platform also leverages Udaan’s logistics and sales network, and has built strong loan re-collection capabilities required to effectively service this segment.
Further, UdaanCapital has developed unique underwriting and risk management tools based on transactional data, thereby enabling credit access.
“Our mission has been to empower and drive Kirana eCommerce by providing formal credit to the small retailers of our country. We have always believed that the right solution to closing the working capital gap in small retailers lies in taking a trade-centric view to risk management — and just as importantly helping our lender partners take a similar view. In Northern Arc we found a like-minded partner, who shared our vision and came on board at a very early stage,” said Chaitanya Adapa, head, UdaanCapital in a statement.
Northern Arc is a financial services platform with a diversified business model that provides credit to MSMEs, households, financial institutions and emerging businesses. Over the past year, it claims to have disbursed over 5 million loans across business loans, personal loans and BNPL facilities, through a completely digital journey.
“At Northern Arc, we aim to be pioneers in finding innovative solutions to enable finance for MSMEs and the next billion households. We do this directly and through exciting partners like Udaan. Nimbus, our digital platform helps us integrate seamlessly with partners, ensuring instantaneous disbursements and best in-class experience for borrowers. We are delighted to have joined forces with UdaanCapital since their early days and meeting the credit needs of over 50,000 kirana stores across the country,” added Ashish Mehrotra, MD & CEO, Northern Arc Capital.