Credit and Finance for MSMEs: Lendkingkart announced a “full-stack” co-lending partnership with an NBFC to enable loan disbursement process without any manual intervention.
Credit and Finance for MSMEs: Small business lender Lendingkart has partnered with non-banking finance company Northern Arc Capital to disburse over Rs 150 crore in working capital to small and medium businesses. The “full-stack” co-lending partnership by Lendingkart’s NBFC arm Lendkingkart Finance will enable loan disbursement process including “data and information flow, bureau check and documents verification and validation to credit decisioning and customer funding,” without any manual intervention, the company said. So far, Lendingkart has disbursed more than 76,000 loans to over 64,000 MSMEs across the country. The company has raised around Rs 983 crores in funding till date.
The partnership will help Lendingkart “reach a wider set of MSMEs” and get “small borrowers into the financial mainstream,” said Harshvardhan Lunia, MD, Lendingkart. Digital lending to small businesses by NBFCs has become a significant alternate route to capital for small businesses that are unable to access bank credit. The growth in the credit given to micro and small enterprises in the current financial year has remained flat so far. According to the RBI’s February bulletin, the gross bank credit growth to MSEs in April FY20 had contracted at 0.1 per cent. The contraction continued month-on-month till December during which the contraction was 0.5 per cent. The December bank credit stood at Rs 10.61 lakh crore — 5.7 per cent up from Rs 10.04 lakh crore in the year-ago period.
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The funds from the tie-up with Northern Arc Capital will be deployed directly into Lendingkart’s core loan origination activity, the company said. “The partnership with Lendingkart has developed over a long period and is now fully integrated with our digital platform Nimbus, allowing us to seamlessly and reliably deliver credit to a larger customer base,” said Kshama Fernandes, MD & CEO, Northern Arc Capital. The NBFC, which offers debt access to under-banked individuals and businesses, had earlier tied-up with consumer lending startup ZestMoney to lend to segments that don’t have enough access to credit.
Finance Minister Nirmala Sitharaman had proposed in the budget to launch a scheme for giving subordinate debt to MSMEs stressing on the working capital challenge faced by them. Lendingkart counts Fullerton Financial Holding, Saama Capital, Mayfield India, Bertelsmann, Darrin Capital Management, Sistema Asia, India Quotient and others among its investors. Capital Float, FlexiLoans, LenDenClub, NeoGrowth, Incred Finance, Indifi, CoinTribe etc are other digital lending startups that offer loans to small businesses.