Lendingkart is a Bengaluru – based digital lending startup. The startup announced today (27/12/2017) that it has secured a loan of Rs. 25 crores from India’s leading public sector bank, State Bank of India (SBI). Co-incidentally Lendingkart happens to be India’s top digital lending startup. So this loan can be treated as a deal/negotiation between two top lending firms in India. According to Livemint, the startup stated that this loan is in the form of cash-credit facility, which means that the startup can withdraw cash from the loan amount as and when it requires it.
SBI’s investment in Lendingkart reflects the trend of public and private sector banks across India to invest in technology-enabled lending firms. Prior to getting this loan from SBI, Lendingkart also secured loans from Kotak Mahindra Bank Ltd. and Yes Bank Ltd. earlier this year (2017).
“We feel extremely privileged to have partnered with India’s largest bank which also shares the same vision of supporting the unbanked SME (small and medium enterprise) sector. SBI is one of the oldest and largest banks in India and has played a critical role in shaping India’s financial landscape for the last century”, said Harshvardhan Lunia, co-founder and chief executive officer (CEO) at Lendingkart.
“With the funds raised, we will further grow our loan books, expanding our reach to many more under-served SMEs”, Harshvardhan Lunia added.
Lendingkart provides small-ticket loans to Small and Medium Entrepreneurs (SMEs) with limited credit history. The credit history of SMEs is evaluated by Lendingkart using technical tools on non-traditional data sources. Lendingkart lends working capital to SMEs to meet their business requirements. The startup raises money in the form of investments or loans from banks from time to time to be able to lend to SMEs. With this loan from SBI, the total debt funding raised by Lendingkart till date sums up to Rs. 378 crores, most of which was funded by Non-Banking Financial Corporations (NBFCs) like Aditya Birla Financial Services, IFMR Capital and Mannapuram Finance. The startup is now looking to raise funds from banks instead of NBFCs.
“It is a gradual progression from NBFCs to banks. All large NBFCs anyways borrow from banks. It is a natural progression to move more and more towards banks. Certainly, NBFCs cannot lend below a certain rate because for themselves, the cost of funds is high”, Harshvardhan Lunia said.
The other digital lending startups to get funded this year (2017) include the digital lending startup, Billionloans Financial Services Pvt. Ltd., which secured Rs. 7 crores in Series A round of funding from Reliance Corporate Advisory Services during July, this year. Lendingkart itself had secured US $10 million (Rs. 65 crores) from Kotak Mahindra Bank and Aditya Birla Financial Services during August, this year. The digital lending startup, Capital Float, raised US $2.3 million (Rs. 15 crores) from Mahindra and Mahindra Financial Services during April, this year. The digital lending startup, ZestMoney, raised US $6.5 million in Series A round of funding from PayU India, Ribbit Capital and Omidyar Network during February, this year (2017) just to name a few.
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