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Published on : Apr 24, 2018

Low credit penetration in emerging markets has been a cause for concern for financial services companies and lending firms. In India, this has attracted massive investments from global players in recent months, with an objective to expand the availability of credit across unserved sections of the economy. In particular, small borrowers-small and medium scale enterprises, manufacturers, and sellers-are hard-pressed for micro-loans. Lenders are securing more equity funding with an aim to expand their portfolio of credit and financial loans and also to consolidate into new, exciting lending categories. Capital Float, the financial technology startup and online lending firm on April 24, 2018 announced that it has secured US$22 million (Rs144 Cr) in Series C funding from Amazon Inc. Of note, this funding forms a part of the $45 million Series C round announced last year in August, where the investors were Creation Investments, Sequoia India, and SAIF Partners, confirmed by the Bangalore-based startup. With this funding, the total equity raised over the past year is pegged at US$67 million.

Lending from Several Banks and NBFCs assists Capital Float in Loan Disbursement

Apart from Amazon India, Capital Float has partnered with several other e-commerce platforms to expand its loan disbursement activity. Prominent names include Shopclues and Snapdeal. Since its inception, the lender focusing on microfinance has secured a whopping US$110 million in equity funding from numerous investors and set an ambitious target of disbursing over US$800 million in loans by the year end. The company has secured over $80 million of debt from several banks as well as non-banking financial companies (NBFCs) to aggregate it into its corpus of loans it disburses to sellers and borrowers. Prominent banks include HDFC Bank Ltd., RBL Bank, the IDFC Bank, and Kotak Mahindra Bank.

Funding to help Lender Expand into New Lending Categories

The current series of funding will be used by Capital Float to bolster its technological capability and consolidate its loan book. The assortment of products the lender takes pride in include specialized loans for doctors, pharmacies, and schools, with a focus on missionary entrepreneurs. Of note, around 70% percent of its loans falls under the category of microfinancing.