The season of debt funding by startups continues, with Cash Suvidha, a Delhi-based online microlending startup adding an additional Rs 17.31 crore ($2.7 million) to its debts taking its total debt funding to Rs 19.2 crore ($3 million). The parent company, Usha Financial Services Pvt. Ltd., has not, however, shared the names of the investors, except to state that the amount has been shared between 6 financial institutions, according to a VCCircle report.
The startup is just about a year old and is into primarily lending to MSMEs in addition to offering personal loans to individuals. It also focuses on women entrepreneurs while extending the loan facilities and by its very nature these are small amounts in lending (average ticket size being around Rs 50,000) and the company claims to have lent to some 27,000 borrowers and the amount disbursed stands at Rs 102 crore ($16 million). The rate of interest varies from 19% to 28%.
Cash Suvidha also has its proprietary mechanism called â€śSuvidha Scoreâ€ť to check on the credit score of the applicants. In addition, they use the social media to check on the background and other credentials before giving the approval of the loan application. They say they receive some 15,000 applications every month for loan processing. Cash Suvidha currently operates in Delhi NCR, Mumbai, Pune, Bangalore and Hyderabad. The fresh debt funds infused will be utilized in recouping its loan books and towards underwriting of loans. Some amount of expansion in the operations will also be attempted.
While on the subject of lending to MSMEs FinBucket and FlexiLoans have also been in the news recently for having raised funding. FinBucket raised Rs 12 crore ($1.8 million) earlier this week from early-stage venture capital firm Impanix Capital. FlexiLoans raised Rs 45 crore ($6.98 million) in debt earlier this month.