Mumbai-based micro-lending startup Ftcash has raised $7.23 Mn (INR 50 Cr) in a Series A round of funding. The round has been led by two new investors, Dutch development finance institution FMO and US-based non-profit investor Accion International.\r\n\r\nFurther, its existing investor VC fund IvyCap Ventures has also participated in the round. With this round, the total funding raised by Ftcash has reached $10.2 Mn.\r\n\r\nFounded in 2015 by Sanjeev Chandak, Deepak Kothari and Vaibhav Lodha, Ftcash provides short-term loans to merchants. The startup plans to use the funds to accelerate product development and drive its expansion efforts.\r\nFtcash: Short Term Loans And Future Plans\r\n\r\n\r\n\r\n\r\n\r\nUnlike many other micro-lending startups in India, Ftcash does not lend from its own books, it ties up with larger lenders such as non-banking finance companies (NBFCs), who often have their own lending operations too.\r\n\r\nThe micro-lending startup uses its technology platform for sourcing, due-diligence, and evaluating borrowers. The startup lends an average of INR 3 Lakh to small businesses such as grocery stores and mom-and-pop outlets.\r\n\r\nThe company uses an algorithm to analyse payments history, along with alternative data sources for originating loans, and deducts repayments straight from the merchants\u2019 online accounts, to remove friction from the lending process.\r\n\r\n\u201cThe innovative proposition of Ftcash is stimulating small and micro entrepreneurship development and financial inclusion in India. FMO is very pleased to support economic development globally by catalysing the establishment of more stable and inclusive financial systems in emerging and frontier markets,\u201d said Ronald Janse, Manager Private Equity at FMO.\r\n\r\nThe micro-lending startup claims to have around 30K customers (borrowers) currently. It further expects a 10x growth in the number of customers in the next 12-18 months.\u00a0Additionally, Ftcash matches merchants\u2019 digital cash flows to credit due dates, increasing the chances of on-time loan payments.\r\n\r\n'There is tremendous potential in the small and micro lending segment, and Ftcash is well positioned to be a leading player, with its proprietary algorithm and end-to-end customer relationship," said Vikram Gupta, founder and managing partner, IvyCap Ventures.\r\nMicro-Lending Startups In India\r\nMicro-lending enterprises are at the bottom of the MSME hierarchy of businesses and the sector is getting increasing interest from the lenders. \u00a0In the micro-lending space, Ftcash competes with players like SmartCoin, KrazyBee, Buddy, Onemi, Finomena and Quicklo.\r\n\r\n\r\n\r\nAccording to a TechSciResearch report, the India microfinance market is projected to grow at a double digit CAGR during 2019-2024. This can be attributed to a growing number of small and medium enterprises in the country, lower interest rates and government initiatives to improve the credit lines for people from lower income groups.\r\n\r\nUdaya Kumar, President, Microfinance Institutions Network, had said in an interview that potential for microfinance, particularly in semi-urban and rural markets, is quite large in India.\r\n\r\n\u201cWith NBFC-MFIs are stepping up to integrate best practices and technology which would help them provide better customer service as well as achieve operational efficiencies. It would definitely have a net positive impact on the performance of the companies,\u201d he added.\r\n\r\nAs the market for microfinance gets larger and easy to access with tier 2 and tier 3 markets coming online, the micro-lending startups are set for next phase of growth.