EarlySalary, an app that offers cash advances and short-term loans to young professionals, has raised its first round of debt financing of Rs 5 crore from IFMR Capital.
The fresh capital infusion will help to accelerate the company’s growth plans, which has disbursed over 7,000 loans last month and plans to hit a target of 30,000 loan disbursements per month by the end of this financial year, reports ET.
Currently, the lending platform is operating in 8 cities, including Mumbai, Pune, Chennai, Bangalore, Hyderabad, New Delhi, Jaipur and Ahmedabad, and looking at expansion into other cities as well.
Akshay Mehrotra, CEO, EarlySalary said, “Powered by digital score carding and robust social media underwriting systems, we have successfully disbursed 7000+ loans last month. EarlySalary is on a high growth trajectory, given the excellent response we have received, especially from young working millennials. Since lending is our main business, money is working capital for us. Getting access to debt for an early stage lending startup is the key to success. And IFMR becoming our 1st debt provider we feel more confident and hope to leverage multiple times on our current equity base and build a strong and large lending book.”
Founded in October 2015 by Akshay Mehrotra and Ashish Goyal and managed by Pune-based Social Worth Technologies, EarlySalary partners with small, medium and large companies to give salary advances to employees.
The firm offers loans in the range Rs 8,000 to Rs 100,000 based on a proprietary algorithm which determines the credit worthiness of an applicant. The credit is handed out for a period of seven days to one month.
Since its launch, EarlySalary app has been downloaded over 350,000 times (with about 20,000 downloads on Apple phones) and has handed out loans totaling to Rs 22 crore to 16,000 applicants. It charges Rs 9 to Rs 10,000 per day as interest.
In May 2017, it had raised $4 million from IDG Ventures India Advisors and publicly traded lender Dewan Housing Finance Corp. In November 2015, it had raised $1.5 million in seed funding from Ashok Agarwal of Delhi-based Transcorp Group.