Delhi-based fintech startup, Cash Suvidha which extends business loans to SMEs, MSMEs, women entrepreneurs and personal loans to individuals, has raised a debt of $2.5 million. Of which, $1.5 million has been raised through private placement on non-convertible debentures and $1 million has been raised from two financial institutions.
The debt investment will be used to increase the loan books of the company. Founded in 2016, the company provides a variety of loans and funds will be primarily used to facilitate further lending to SMEs and to cater to the loan needs of Individuals, particularly in Delhi NCR, Bangalore, Pune, Hyderabad, Mumbai, and Rajasthan.
Cash Suvidha has been closely monitoring the business environment and helping potential MSMEs to propel by providing effective financial solutions in no time. It also helps individuals to avail personal loans to pursue their aspirations by avoiding the tedious process of accessing funds from larger financial institutions.
Rajesh Gupta, founder of Cash Suvidha, said, “This capital infusion will provide 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. With our aim to provide easy access to credit and working capital to SMEs, 80 percent of our loans are targeted towards SME sector in India”
According to a report released by the International Financial Corporation (IFC), small businesses in emerging markets, such as India, are facing a funding gap of $2 trillion. Endeavouring to make the entire process hassle-free, Cash Suvidha provides loans within two working days.
The fintech startup receives around 15,000 loan applications per month and has disbursed a total amount of Rs 122 crore. since its inception. In December 2017, the company raised a debt of $2.7 million from six financial institutions. Cash Suvidha has managed to become profitable and has maintained its break-even since the beginning of its operations.Within a short span of one year of its operations, company tied up with over 14 players to expand business across India and has targeted a 5x increase in processing loan applications. In terms of future plans, Cash Suvidha is targeting more tie-ups for business expansion.
Since its inception, Cash Suvidha has disbursed to over 30,000 borrowers and the average ticket size of loan is between Rs 20,000 and Rs. 500,000.