Lendingkart, a small business lender that provides business loans and working capital loans, has raised $15 millions in debt for its NBFC arm, Lendingkart. The money was raised by non-convertible debentures, bringing the total amount of money the company has invested to $19 millions. Lendingkart plans to reach out to over 5,000 new MSMEs with the new funding, with an emphasis on women entrepreneurs and small businesses. Lendingkart has raised this debt to help MSMEs realise their plans and achieve the Bharat financial inclusion target, as the new normal is about sustainability and stable business.
Overview of LendingKart’s Debt Funding
- Despite the fact that India experienced one of the strictest lockdowns as a result of the pandemic, which impacted businesses, especially ones with scarce working capital and access to finance, no government data on the number of pandemic-affected units is available. Although the Centre has announced a number of schemes to aid pandemic-affected MSMEs in their recovery, since MSMEs exist in both the formal and informal sectors, data on temporary or permanent closures of units is not kept by the Government of India’s Ministry of MSME.
- Lendingkart, which has generated around one lakh loans to over 90,000 MSMEs by its non-banking arm, plans to use the funds to extend the scope of its financial products across about 100 sub-industries in India’s MSME sector. Lendingkart plans to add about 1.25 lakhs MSMEs to its portfolio by FY22, propelling the most-watched segment to accelerated growth. The business plans to expand by 40% this year compared to the pre-pandemic financial year, and will introduce new products. Its investor, the FMO, promotes long-term private sector development in developed and emerging markets.
- According to Crunchbase, Lendingkart raised $242.5 millions in total prior to the current round. In 2016, the company acquired KountMoney, an online lending platform for personal loans.
- Lendingkart’s investment comes as the government cracks down on lending or business loan apps that offer instant credit online. Under Section 69A of the Information Technology Act of 2000, the Ministry recently blocked 27 lending applications. The information was shared in the Lok Sabha earlier this week by the MoS Finance Ministry in relation to the government’s efforts to combat fraudulent Chinese lending apps operating in India. However, he did not mention the names of the blocked loan apps in his response. In India, the amount of digital lending increased from $33 billions in FY15 to $150 billions in FY20, and it is expected to reach $350 billions by FY23.
Different Types of Working Capital Loans
Often a company’s liquidated assets are insufficient to run day-to-day operations. Leasing, mortgage payments, and payroll are examples of these activities. They apply for various types of working capital loans during these periods. Working capital loans, to put it simply, are the debt that a business uses to run its day-to-day activities. Both secured and unsecured loans are available. If you’re looking for a loan, the business loans available on Finserv MARKETS are a great option. It has a flexible maturity period, great offers, low business loan interest rates, and top-up options. Finserv MARKETS’ entire application and approval process is easy, fast, and can be completed entirely online.