Globally, India's ranking in ease of doing business has improved by 79 places in the last 6 years from 142nd in 2014 to 63th in 2019. However, due to shortness of credit history, lack of collaterals and accounting discipline in Small and Medium Sized Enterprise (SMEs) procurement of loans from banks is difficult and makes them dependent upon fundraising from friends, family and shady money lenders.
With the aim to democratize and digitalize the working capital loan process for SMEs, Fintech Start-Up Lendingkart was launched in 2014.
Vision behind the Lendingkart :
Harshvardhan Lunia, ex-banker and during this time he realised the problems faced by SMEs during the lending process and various inefficiencies of the banks. The process being time-consuming and lack of information and communication at each stage took months for getting sanctions.
The idea of a platform for instant working capital finance was conceptualised by Lunia, and was supported by Mukul Sachan, ex-ISRO scientist who is responsible for giving a coherent shape to the terms of a viable business model.
Lendingkart - Leading NBFC Group
Lendingkart, a non-deposit taking Non-Banking Financial Company, providing easy and online access to finance to SMEs via ascertain its creditworthiness in much lesser time taken by peers.
Harshvardhan says “We envision Lendingkart Group NBFC to become synonymous with an online credit provider that has the simplest and most efficient loan delivery system, easiest access and the most elastic terms by leveraging on cutting-edge technology for data analytics and cash management.”
Actively raising funds, Lendingkart has raised over about $ 200.44 million till date through 11 funding rounds including latest funding round in August 2019 led by Sistema Asia Capital. The company has been supported by the likes of State Bank of India, Yes Bank, and Fullerton Financial Holdings. Other investors include Bertelsmann India Investments, and Alteria Capital.
With the last funding, the Start-Up intended to use it for toughening its technology and analytical capabilities, deepen its reach to under-served SMEs to expand its lending base.
Pillars on which Lendingkart is based upon :
● No human interference ( while address subjectivity and last mile fraud)
● Quick Creditworthiness (to decrease processing time significantly)
● Instant money (addressing the real- time demand)
● Simple (ensuring dependencies on intermediaries)
● Hyper-flexible terms for repayment and renewal.
Why Lendingkart ?
● Ownership is preserved – Being endorsing an unsecured loan, there is no risk of losing assets or giving away any stock as an investment. Hence, the business ownership is preserved and business loan offers with amount to expand your company ever further.
● Quick loan processing – availing access to credit for your business at much lesser time (within 3 days) and with minimal paperwork as compared to other market leaders. Increase in cash at disposal improves the business operations and so increases profit margin.
● Cash flow gets streamlined - Loan amount is to be repaid in EMIs, so it becomes easy for the entrepreneur to capitalize on the situation wherein the cash flow is not a problem. Post loan sanctioning, the business is given ample cash and time to make it profitable.
● Credit Score gets improved - Business loan offered by NBFCs tend to report it to all credit bureaus which further results in gradual increase in the credit score. The Start-Up makes sure that the credit score gets improved, if it is bit low due to several market scenarios.
Eligibility Criteria :
Following criteria needs to be fulfilled by the SMEs before application for the finance :
1. Business should have been in the operations for past 6 months
2. Minimum turnover of ₹ 90,000 or more in the 3 months preceding your loan application
3. Business name must not fall under the excluded list
4. Physical location of business should not be in the list of negative area
5. Charitable institutions, NGOs and trusts are not eligible for small business loans.
Process of Lending Finance :
● Online Application - Through website one can apply along with various details and documents :
○ Background of business
○ Nature of business
○ Certificate of incorporation
○ One year revenue generation
○ Cash flow statement
● Processing of Information and determination of credit-worthiness - With the use of big data scoring and analytics, its analytics team evaluates the business of the borrower.
● Disbursement of funds - The entire process is digitally integrated and the NBFC disburses the loan within 72 hours from the time of application. The loan amount is then dispersed through affiliated lenders, or lending partners within a short span of three days.
Future Ahead :
Lendingkart, since its incorporation, has evaluated more than half a million applications, disbursing more than 60,000 loans to more than 55,000 MSMEs in more than 1300 cities across all 29 States and Union Territories of the nation.
Having its headquarter in Ahmedabad, Lendingkart is also present in Bangalore, Mumbai, Delhi NCR and Kolkata but have a service reach across India. With a very huge number of MSMEs, the Start-Up will be focussing on untapped and under-served SMEs.
Harshvardhan Lunia said, “Lendingkart team aims to strengthen its technology platform and enhance mobile capabilities to facilitate lenders for higher month-on-month growth in terms of loans disbursed and businesses catered to.”