Online microlending platform Cash Suvidha raises pre-Series A funding

Online microlending platform Cash Suvidha has raised $1-million (Rs 6.48 crore) in pre-Series A funding from Initia Holdings Ltd. India Industrial Growth Fund’s principal partner Vipin Agarwal, among others, also participated in the round.

Cash Suvidha, which is owned and operated by Delhi-based Usha Financial Services Pvt. Ltd, will use the fresh capital to grow its loan book, besides strengthen its technological infrastructure,​the company said in a press statement.

The funds will be primarily used to facilitate lending to small-and-medium enterprises and to cater to the loan needs of individuals, particularly in Delhi-NCR, Bengaluru, Pune, Hyderabad, Mumbai and Rajasthan, it added.

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

“This capital infusion would help us in widening our horizon and in extending our best alternative lending services across geographies,” Gupta said.

Cash Suvidha had recently launched its operations in Kota and Jaipur and plans to expand its footprint across Rajasthan, including Ajmer. “After covering Rajasthan, we will move towards Gujarat and other parts of India,” Gupta added.

The company, which charges interest rates of 19-28%, says it processes loan applications with 48 hours. It typically caters to loans ranging between Rs 20,000 and Rs 5 lakh.

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

According to the company, it has so far disbursed loans worth Rs 152 crore to over 35,000 borrowers.

Cash Suvidha has so far raised $3 million (Rs 19.2 crore) of external funding, which includes the December 2017 debt funding round of $2.7 million.

Online lending

Cashu Suvidha is, however, not alone. Some of its online peers have also raised funds over the past couple of months.

Earlier this month, Bengaluru-based Goddard Technical Solutions Pvt. Ltd, which operates online lending platform Avail Finance, had raised $17.2 million (Rs 111 crore) in fresh round led by venture capital firm Matrix Partners.

In January, Pune-based online lending platform EarlySalary raised Rs 100 crore ($15.7 million) in its Series B round led by Eight Roads Ventures India.

The same month also saw media conglomerate Bennett, Coleman and Company Ltd (BCCL) acquiring a stake in a Mumbai-based online lending firm Finreq.

FinBucket, a loan and investment startup for SMEs and MSMEs, had raised Rs 12 crore from Delhi-based early-stage venture capital firm Impanix Capital. Digital SME lending platform FlexiLoans also raised Rs 45 crore ($6.98 million) in debt last December.

Last November, non-banking financial company Prest Loans raised Rs 3.7 crore from angel investors. Wealth management app Fisdom, too, raised $3.84 million in a Series B round led by Quona Capital Management Ltd and existing investor Saama Capital.