Chennai-based digital lending startup OptaCredit has raised over Rs 25 crores of credit line from DMI Finance. The startup will use proceeds to lend to its target groups and to ramp-up its balance sheet that can be used to raise more capital from the market.
The fresh capital infusion will also be used towards setting up its offices in Bengaluru and Hyderabad.
Unlike typical financing, the Credit line is essentially an agreement between a financial institution and the borrower, where the latter can access credit amount in multiple parts or at one shot over a specified period.
Focussed on white-collar salaried workers, OptaCredit was founded by Kumar Srivatsan, who has worked with the Royal Bank of Scotland and several banking and financial sectors.
The startup is now focussed on local trading firms that generate the cash flow as top-rated firm. They also tap into new-to-credit plus uncategorized employers, reports Livemint.
OptaCredit provides a loan in a range of Rs 1- 2 lakh for an average tenure of two years. It charges 8.8 to 15.8 per cent interest annually and takes 2.5 per cent of the credit amount as a servicing fee.
Partnered with RBI Bank, it secured an NBFC license from the Reserve Bank of India in 2016 but the company was in talks with other Non-Banking Finance Corporations (NBFCs) for lending purposes.
OptaCredit offers its customers the right to get access to timely credit. The company firmly believes in customer more than ratios and numbers.
It competes with Paysense, FlexiLoans and Lendingkart and others in the lending startup ecosystem.
Over the past few months, multiple lending platforms have secured institutional and debt funding. Earlier this month, Lendingkart Finance raised Rs 30 crore from Dutch development bank. Previously, it secured debt from YES Bank.
Meanwhile, Mumbai-based Paysense raised $5.3 million series A round from Jungle Ventures. EarlySalary, which offers salary advances and instant cash loans has also raised $4 million from IDG Ventures India and DHFL in 2017.