Delhi–based microlending startup, Cash Suvidha announced that it has raised $ 2.5 million (approximately Rs 16 crore) in debt financing.  According to a statement released by the company, it raised $1.5 million via a private placement of non-convertible debentures and the remaining $ 1 million from two financial institutions, whose names remain undisclosed.

“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,” Rajesh Gupta, Founder, Cash Suvidha, said.

The startup had previously raised an institutional debt of $2.7 million from six financial institutions, whose names remain undisclosed.  The funds raised from the latest debt financing round will be employed in increasing the startups loan books. The fin-tech startup provides a variety of loans and has stated that the proceeds will primarily focus at facilitating further lending to small and medium enterprises. In addition to this, the company will also cater to the needs of individuals, particularly in the National Capital region, Bengaluru, Pune, Hyderabad, Mumbai, and Rajasthan.

“With our aim to provide easy access to credit and working capital to SMEs, 80% of our loans are targeted towards SME sector in India,” Gupta said.
The startup has also stated that it receives over 15,000 applications on a monthly basis and has reportedly disbursed a total amount of approximately Rs 122 crore in loans since it was founded. It has also claimed to have disbursed loans to over 30,000 customers with the average loan amount ranging from Rs 20,000–Rs 5 lakh.

The statement issued by the company also added that the startup remains profitable and has maintained its break even status since the commencement of operations.

In December of last year, it was reported that the startup had joined hands with HomeCapital in order to extend credit to first time home buyers.  The fin-tech startup does not employ the conventional credit worthiness mechanisms and instead, uses social credit as a parameter to assess an applicant’s credit worthiness and ability to repay the loans, and thus providing credit to those individuals who would not have access to the traditional lending practices.

“We have developed our own ‘Suvidha Social Score’ for assessing creditworthiness using social media portals to check educational and professional backgrounds, tracking lifestyle spends, payments behaviour, and spending patterns,” Gupta said.

(Picture courtesy: Cash Suvidha)