Have a dream to fly giving wings to your unique business idea. Now is the time to get going! Gone are the days when your business idea would die an unsung death for want of viable funding. Welcome to the world of new-age fund missionaries: if your SME business idea has business potential, Lendingkart, a funding for small business venture, is eager to set up a date with you. Leading a small yet motivated team of bankers, data scientists and techies, Harshvardhan Lunia, Co-Founder & CEO, Lendingkart, is trying to make a difference to the world of small business financing. SMEpost.com caught up with Lunia to unveil his vision for the ever growing SME space. Edited excerpts:
Q: Funding has been a traditional challenge for the SME sector. How viable is your promise to mitigate the challenge?
A: India’s SME sector is critical to the health of the economy and continues to grow at a robust rate. It contributes 17% of India’s GDP; 45% of India’s manufacturing output and 40% if its exports. It has also outperformed IIP and GDP over the years, providing employment to 106 MM people in the country. Considering the massive potential that the sector has, Government is focused on creating a business-friendly atmosphere to promote entrepreneurship.
However, unfortunately MSMEs in India face a considerably high capital deficit of INR 9 lakh crore making them underperform. Therefore, Lendingkart Group aims to bridge this gap by enabling easy loan access to Indian SMEs making them reach their true potential.
Q: Lending platforms have taken up the online space quickly. How does Lendingkart fit into this space?
A: Today, digital lenders have sprung up in the online space because of their unconventional approach to lend funds. They use technology and analytics to gauge credit worthiness of applicants in real time. Unlike banks, digital lenders’ process is completely paperless without any collateral which makes it convenient for SMEs to borrow required funds for their business.
At Lendingkart Group, through our completely online and automated process, we assess the credit risk profile of a borrower and offer working capital loans within 72 hours from the time of application through our Non-Banking Finance Company (NBFC). The SME can then use the fund to enhance service, increase inventory, and to make payments to supplier, employees, taxes, and other meet liabilities.
Q: How do you separate your services from that of banks and other lending platforms?
A: Lendingkart Group enables SMEs to apply for loans on basis of only an online application. Our NBFC has algorithms, using their proprietary knowledge to do credit scoring. Those algorithms use 2100 + raw data points to generate a lending decision almost instantaneously resulting in loan approval within 72 hours from the time of application. We offer a highly accessible, simple and flexible online platform to the SMEs.
Our NBFC assesses the credit worthiness for ecommerce vendor/market places sellers based on their online foot print. Without any collaterals, physical offices or physical verification staff members on the ground, the digital lending platform provides short-term working capital loans of INR 50,000 to INR 10 Lakhs based on an online form filled by the borrower in a short span of 15 minutes. Since our inception, we have been able to assess SMEs in more than 135 cities across 22 states in India. The idea is to cover all towns and cities in India.
Enough data is available to determine a customer’s intent to pay back a loan, quality of his product/service, financial health of his business, and ability to survive with competition etc. We don’t ask customers to ‘Fill large forms’. Our NBFC scrapes this data from public/private sources, APIs.
Q: How does Lendingkart cater to the needs of SMEs? Are there any specific SME sectors you specially focus on?
A: Lendingkart Group’s long term goal is to serve MSMEs across sectors in India. However, we currently focus on loan disbursements to MSMEs across India.
Q: We understand you give collateral free loans. How do you ensure security of repayment?
A: Once an applicant uploads the minimum required documents, they are then handed over to Group NBFC that verifies and transfers to its analytics team to determine the creditworthiness of the applicant.
Therefore, on the basis of financial health, relative market performance, compliance practices, and social reliability, the NBFC closely assesses the applicant’s risk profile to assess his creditworthiness.
Q: Your loan application process is 100% online. How do you tackle with cyber threats?
A: The IT environment is set up on Amazon Web Services (AWS), which provides, by default, the protection from unauthorized access from unrecognized IP addresses. Separate dedicated environments have been created internally to protect production environment from development/testing activities.
Databases and application servers have been set up in clusters rather than single hosts to improve the availability and disaster recovery. Firewall is enabled at the AWS level to protect from cyber-attacks. We also ensure IP whitelisting of any external services/data partners as well as a secured channel for data communication over the network.
We are following the security standards for internet technology by ensuring secured communication channel between client (browsers) and servers. Wherever possible, the key information for the customer has been encrypted and stored/processed. Application access is controlled through Basic Authentication and all the reads are re-authenticated even if originated from the same source.
Q: We understand you disburse money in three days. Please throw some light on how do you manage to do that.
A: Since our NBFC uses algorithms and propriety knowledge to do credit scoring, the whole process becomes smooth and fast. Those algorithms use 2100 + raw data points to generate a lending decision almost instantaneously resulting in loan approval within 72 hours from the time of application.
The NBFC also scrapes data from public/private sources, APIs. This helps them determine the credit worthiness of applicants.
Q: What are your expansion plans in near future?
A: Our long term goal is to facilitate to fulfil working capital requirements of the highly underserved MSMEs of the country, therefore, the Group’s vision is to expand its presence across all towns and cities in India so that SMEs can focus on business without being worried about gaps in their cash flows.
