Ahmedabad-based SME lending startup, Lendingkart Finance, announced that it has raised Rs 25 crore in debt from the State Bank of India (SBI). In a statement, the company said that the loan is in the form of cash and credit facility which will allow the startup to draw the amount in separate tranches as and when required.

SBI’s investment in the start up is indicative of the push by banks across India, both public and private sector ones; to reach more borrowers by backing technology enabled lending start ups. Earlier this year, two prominent banks, namely Kotak Mahindra Bank and Yes Bank joined the board of the startup as lenders.

“We feel extremely privileged to have partnered with India’s largest bank which also shares the same vision of supporting the unbanked SME sector. SBI, being one of the oldest and largest banks, has played a critical role in shaping India’s financial landscape for the last century,” said Harshvardhan Lunia, the Chief Executive Officer and Co-founder of Lendingkart. “With the funds raised, we will further grow our loan books, expanding our reach to many more under-served SMEs,” he added.

With the latest influx of funds, the company plans to expand to 950 cities across the country. So far, Lendingkart has disbursed over 20,000 loans to over 12,000 SMEs across 23 sectors. Till date, more than 370,000 SMEs have reached out to Lendingkart to meet their credit requirements.

The startup was founded in 2014 by ex-banker Harshvardhan Lunia and former ISRO scientist Mukul Sachan. The company is aligned with Government of India’s agenda to ensure financial inclusion across the country and individually focuses on ensuring the availability of working capital and credit to SMEs across the country via its platform.

The startup uses an in-house developed technology based on big data analytics and machine learning algorithms to evaluate a client’s credit worthiness. According to reports, around 5000 data variables are analysed to determine factors like financial health, comparative market performance, social reliability and compliance. Once the evaluation process is completed, the loan is disbursed to the deserving borrower within 72 hours of the application being filed. The company’s Lendingkart Finance unit raises money from the market from time to time and lends it to borrowers.

With the latest round of funding, the total debt raised by the start up till date has grown to Rs 378 crore. Most of the debt has been raised from non banking financial companies (NBFCs) such as Aditya Birla Financial Services , IFMR Capital and Mannapuram Finance. The company has also received over Rs 200 crore in equity funding from well-known backers such as Bertelsmann India Investment, Saama Capital, Mayfield India, India Quotient, and Darrin Capital Management.

(Picture Courtesy: Indianceo.co.in)