London and Mumbai-based business loans startup CreditEnable, on Tuesday (January 19), announced that it has raised $2 Mn in a pre-series A funding led by startup incubator Venture Catalysts, along with its UK arm JPIN Venture Catalysts. Prior to this, the company had also raised $5 Mn in a seed round from investors such as SunGard CEO Cris Conde, Alter Global and Astia and Floreat.
With the latest funding, the company said that it will be using the fund to enhance its technology platform, alongside expanding its customer base across the country, thereby eliminating the bottlenecks in India’s SME lending landscape.
Founded by seasoned investors Nadia Sood and Varun Sahni in 2017, CreditEnable is a credit marketplace that uses data analytics and AI to support SMEs in procuring different types of business loans. Also, the company claimed to help lending entities improve their approval rates to above 70% and disburse loans faster at competitive interest rates.
Some of its clients include private sector banks, NBFCs and financial lenders, including IDFC, First Bank, ICICI, Bajaj and international financial Institutions like Deutsche Bank and DBS among 20 plus lending partners. The platform offers business loans starting from INR 10 Lakh to INR 30 Cr with lender rates starting from 9%.
The Rise Of Business Loans Apps
“In 2020 alone, $4.5 trillion of available financing didn’t get to suitable borrowers, meaning that today’s announcement is bridging a critical deficit that inhibits SME growth,” revealed CreditEnable, in a press statement.
CreditEnable cofounder Sood said that Covid-19 pandemic has accelerated the adoption of digitisation within financial services in a big way. “Getting affordable finance into the SME segment at scale is going to be critical to our global economic recovery,” she added.
Venture Catalysts cofounder Apoorv Ranjan Sharma added that CreditEnable is well poised to solve the most relevant gaps in the Indian lending market, especially in the current pandemic environment when the demand for business loans has increased.
CreditEnable is not alone in this space — other players in the space include NeoGroth, DMI Finance, Flexi Loans, AYE, U GRO Capital, Lendingkart, Capital Float, Indifi, Novac among others.
According to Inc42 Plus, India has about 1,263 digital lending startups, out of which 12% are backed by venture capital funding. Further, the report stated that with venture capital inflow in B2B lending startups growing at CAGR (2015-2019) of 72%, digital lending remains the most favoured category within the lending tech segment.