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Online microlending platform Cash Suvidha raises $2.7 mn in debt funding
Photo Credit: Shah Junaid/VCCircle

Delhi-based Usha Financial Services Pvt. Ltd, which operates online microlending platform Cash Suvidha, has raised $2.7 million (Rs 17.31 crore) in debt funding, a company statement said.

The one-year-old startup raised this amount from six financial institutions, the statement added but not reveal the identity of these lenders. The latest round takes the total debt funding raised by the company to $3 million (Rs 19.2 crore) since its inception.

Rajesh Gupta, the co-founder of the venture, stated that the funds will be used to replenish its loan books and underwrite loans.

Cash Suvidha was founded in June 2016 by Gupta, Anoop Garg and Geeta Goswami. It offers micro-business loans to small-and-medium enterprises and women entrepreneurs besides extending personal loans to individuals. It also services potential applicants who fall outside of the traditional credit scoring platforms.

The company, which lends at an interest rate ranging between 19% and 28%, claims to disburse loans within 48 hours of its application, with the average loans application size being Rs 50,000.

A proprietary credit scoring mechanism, dubbed ‘Suvidha Score’, is deployed while assessing the creditworthiness of the applicants. The assessment mechanism largely relies on social media portals to check educational and professional backgrounds, tracking lifestyle spends, payments behavior, and spending patterns.

Cash Suvidha, which receives around 15,000 applications per month, has dispersed loans worth Rs 102 crore ($16 million) to more than 27,000 borrowers till date. Going forward, it plans to expand its operations five-fold, besides processing loan applications and will focus on markets like Delhi NCR, Bangalore, Pune, Hyderabad and Mumbai.

While Gupta and Garg are commerce graduates from Delhi University, Goswami is a law graduate and an associate member of Institution of Companies Secretary of India.

Recent deals in the financial lending space include FinBucket, a loan and investment startup for SMEs and MSMEs, which earlier this week raised Rs 12 crore ($1.8 million) from Delhi-based early-stage venture capital firm Impanix Capital. Earlier this month, digital SME lending platform FlexiLoans raised Rs 45 crore ($6.98 million) in debt.

In November, non-banking financial company Prest Loans raised Rs 3.7 crore ($570,000) from angel investors. In the same month, wealth management app Fisdom raised $3.84 million (Rs 25 crore) in a Series B round led by Quona Capital Management Ltd and existing investor Saama Capital.

A VCCircle analysis conducted in May this year showed that a number of fin-tech startups raised venture funding. The inflows were evenly spread across lending, payments and wallets. Digital wallet firm Paytm may have got the biggest slice of the funding pie, raising a whopping $1.4 billion.

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