Credit Fair, a consumer lending fintech startup, has secured an undisclosed sum as debt from Northern Arc Capital, the company said in a statement on Wednesday.
The company said it plans to use the debt fund amount to offer specific financing for education, medical, electric vehicles, and home renovations.
“We will benefit from Northern Arc’s experience in advising hundreds of leading companies in financial services. Besides the injection of funds, they will advise us on optimizing our debt-raising strategy.” Aditya Damani, Founder of Credit Fair said.
Credit Fair is looking to expand its portfolios with products and services by partnering with other non-banking financial companies.
Formed by Aditya Damani in May 2018, the B2B2C lending-focused startup aims to build a credit ladder for 550 million underserved Indians. It offers lending solutions to both businesses and private individuals. The ticket size ranges from Rs 10,000 to Rs 20 lakh and tenure from three months to three years.
Its financial partners are over 1,000 merchants including brands such as upGrad, Nova IVF, Design Cafe, Asian Paints, Arrivae, Hero Electric and Ampere by Greaves.
Northern Arc Capital (formerly IFMR Capital Finance) is a digital debt platform that caters to the under-banked in the Indian financial services sector set up primarily to provide access to debt capital to meet diverse credit requirements of under-served households and businesses.
The Chennai-based lender, which has filed for an IPO to raise up to Rs 300 crore and an offer for sale (OFS), may also consider issuing shares on a private placement for up to Rs 150 crore prior to the filing of the DRHP as Pre-IPO placement.
The proceeds from the issue will be used towards augmenting its base capital to meet future capital requirements.
As on March 2021, its capital to risks weighted asset ratio was 28.89% of which tier-I capital was 27.62%.
Axis Capital Limited, Credit Suisse Securities (India) Private Limited, IIFL Securities Limited and SBI Capital Markets Limited are the Book Running Lead Managers to the issue.
For FY21, Net profit stood at Rs 76.59 crore on a total revenue from operations at Rs 681.17 crore as compared with Rs 102.93 crore a year ago on a revenue of Rs 632.82 crore last year. Its gross NPA stood at 2.3% while net NPA was at 0.9%.
The non-deposit taking NBFC’s total outstanding borrowings were at Rs 3,920.81 crore.