Online Lending Startup Cash Suvidha Raises $2.5 Mn In Debt Funding

Delhi-based online lending platform Cash Suvidha has raised $2.5 Mn in debt financing through financial institutions and private placement.

The fintech startup has raised $1 Mn from two financial institutions and $1.5 Mn through private placement on Non-Convertible Debentures.

Cash Suvidha will use the latest funding to increase the loan books of the company. The loans will cater to financing SMEs and individuals particularly in Delhi NCR, Bengaluru, Pune, Hyderabad, Mumbai, and Rajasthan.

Rajesh Gupta, Founder of Cash Suvidha, said,“This capital infusion will provide the impetus for further accelerating the company’s exciting growth plans. The influx of funds will enable us to replenish our loan books and will allow us to cater to a wider range of SMEs across the country.”

Cash Suvidha: Leading The Online Lending Charts With Its Profitable Venture

Founded in 2016, Cash Suvidha offers business loans to Small and Medium Enterprises (SMEs), Micro Small and Medium Enterprises (MSMEs), and women entrepreneurs and personal loans to individuals.

The company claims to receive 15,000 loan applications per month and has disbursed $19 Mn (INR 122 Cr) since its inception.

Earlier in December 2017, Cash Suvidha raised $2.7 Mn debt funds from six financial institutions.The funds were primarily used to facilitate further lending to Small and Medium Enterprises (SMEs).

Cash Suvidha has tied up with over 14-15 players to expand business across India and disburse loans within 48 hours. The company claims to have disbursed 80% of its loans to SMEs.

In an official statement, the company also claims to have become profitable and has attained break-even since its inception.

India: Opening Doors Of Opportunities For Online Lending Startups

Similar to Cash Suvidha, there are other online lending portals like Aye Finance, NeoGrowth Credit, OptaCredit etc., of whom many have grabbed investors attention earlier.

For instance, in January 2018, AyeFinance raised $6.28 Mn (INR 40 Cr) as a Term Loan from IFMR Capital. NeoGrowth Credit has raised $47 Mn (INR 300 Cr) in equity funding from investors led by LeapFrog Investments. Also, OptaCredit secured an initial $4 Mn credit line from DMI Finance.

Overall, as per Inc42 DataLabs Indian Startup Funding report 2017, the Indian fintech industry has received $2.5 Bn in 2017. Here, in January 2018, alone, the Indian fintech segment received $102.72 Mn in funding.

The rising investor’s interest in the online lending domain is on back of the increasing opportunities in the Indian fintech and lending segment.

As per a report released by the International Financial Corporation (IFC), small businesses in emerging markets, such as India, are facing a funding gap of $2 Tn. Further, In its report Credit Suisse indicated that the global consumer and SME loan market is expected to reach $3 Tn over the next decade, owing to government’s initiatives to provide hassle-free and cashless financial transactions.

A NASSCOM report has earlier forecasted that Indian fintech software market will touch $2.4 Bn by 2020, from the present $1.2 Bn. A report from investment bank MAPE Advisory Group and consulting firm MXV largely attributed this growth to the surge in the use of mobile wallets and insurance services, among others.

With the growing potential of fintech segment and government accepting the presence of fintech in Union Budget 2018, it is to be seen what more is done in the sector. As Cash Suvidha raises its latest funding round, it is to be seen how much more the online lending portal offers to its customers.