Credit and Finance for MSMEs: Online MSME lender Lendingkart on Thursday said it has hit the $1-billion loan disbursement mark since it received its non-banking financial company (NBFC) license in 2015. The loans were disbursed to 1.3 lakh MSMEs so far. Lendingkart, which competes with Indifi, Aye Finance, Flexiloans, Capital Float, NeoGrowth Credit, U GRO Capital, Kinara Capital, and more, in the MSME lending space, offers short-term collateral-free working capital loans with little or no credit history available of borrowers. The loan size ranges from Rs 50,000 to Rs 2 crores with a repayment period of one to 36 months.
“We have witnessed a compound annual growth rate of over 200 per cent so far. This year we are planning to lend close to Rs 3,500 crore ($464 million). Last year was a bit of a patient-year for us as we did only reasonable business but from November till March was a great period. However, from April till June, it was again a breather for us but since July we are seeing much better business while September-October has been better than pre-Covid levels,” Harshvardhan Lunia, Co-Founder & Managing Director of Lendingkart Technologies told Financial Express Online.
The company said that based on its proprietary underwriting model, Cred8, which is a credit Intelligence platform, it has provided ‘credit sanctioned’ loans to 2.5 lakh MSMEs worth $1.6 billion. Moreover, through API and software-as-a-service (SaaS) platform Xlr8, launched in January this year, for channel partners and direct selling agents to boost their MSME reach, the company has concluded around 600 partnerships “which has witnessed multifold year on year growth,” Lendingkart said.
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“Currently larger institutions are focusing more on secured loans while smaller businesses, which are considered risky, are not getting enough money. So larger institutions are not participating as much as they were before Covid. However, large private businesses are focusing on sectors like renewable energy, retail, etc., where investment is being made massively. This is expected to continue for two-three years. As a result, the MSME cycle will run well which is also good for us,” said Lunia
The company had last November launched its co-lending SaaS platform Lendingkart 2gthr to enable banks and NBFCs to seamlessly onboard within two weeks and disburse unsecured loans to MSMEs. Lendingkart said that within 18 months, 2gthr has become the largest co-lending platform onboarding seven large banks/ NBFCs and several more in the pipeline with credit lines of over $280 million. Lendingkart has secured over $650 million in debt capital from more than 80 lenders so far.
Lendingkart’s investors include Fullerton Financial Holding (FFH) — a subsidiary of Singapore Sovereign Fund Temasek Holdings, Bertelsmann, Mayfield India, Saama Capital, Sistema Asia, India Quotient, and others. According to World Bank estimates, the MSME credit gap in India is worth $380 billion while credit to micro and small enterprises (MSEs) by banks is only 10 per cent of the overall gross bank credit in the country. Banks had deployed Rs 11.10 lakh crore to MSEs in August 2021 while total gross bank credit stood at Rs 108.97 lakh crore, the latest data from the Reserve Bank of India had showed.