Digital lending platform Lendingkart has raised $10 million in debt from Kotak Mahindra Bank, Aditya Birla Financial Services and Tata Capital including other financial institutions. The debt was raised by NBFC subsidiary of the company.
The digital platform provides loans in the range of Rs 4-5 lakhs to small and medium businesses. It has built a technology platform to service the working capital financing needs of SMEs in India.
Founded in 2014, by ex-banker, ISB Hyderabad alumnus, Harshvardhan and ex-ISRO scientist, IIM Bangalore alumnus, Mukul Sachan, so far Lendingkart had raised $26 million in equity funding from investors including Bertelsmann India Investment, Saama Capital, Mayfield Fund and India Quotient among others.
“We will continue to raise debt funding to build our book and lend to more businesses,“ CEO Harshvardhan Lunia said to the Economic Times.
Lendingkart has been persuading banks to secure debt funding as they lend at a lower rate than NBFCs.
“NBFCs lend at about 12-13% while banks lend at around 10-11%, which is one of the critical points. However, we will maintain a balance between banks and NBFCs, since NBFCs understand our business better,” added Lunia.
The Ahmedabad-based venture is also moving towards hybrid lending model. The model will start co-lending with banks and other financial firms through a marketplace platform in the next six-nine months.
Currently, Lendingkart claims to have disbursed Rs 600 crore loan across 9,500 SMEs. However, it plans to increase loan disbursal to Rs 1,600 crore across 20,000 business by the end of current financial year.
Of late, funding for SMEs has traditionally been limited to businesses that have solid financial credentials or assets to back the loan. However, emergence of technology-led new age lending platforms such as IndiaLends, Faircent, Kudos Finance and Investment and Capital Float are easing the process for SMEs to secure funding for operational expenses and scaling-up.