Lendingkart: Revolutionising MSME Loans With Technology And Innovation

Lendingkart: MSME Loans Providing NBFC

Lendingkart Finance Limited (LFL), a leading NBFC established in 2014 by Mr. Harshvardhan Lunia, specialises in providing unsecured loans to meet the working capital needs of small and medium-sized enterprises (SMEs). Operating as part of the Lendingkart Group, the company has garnered support from prominent investors, including Fullerton Financial Holdings (FFH), Saama Capital, and Bertelsmann India Investments. Its technology arm, Lendingkart Technologies Private Limited (LTPL), owns 100% of LFL, with FFH holding a significant 38.16% stake as of FY2023.

With over 1.1 lakh active loan accounts and an impressive AUM of INR 6,247 Cr as of September 2023, Lendingkart Finance has become the largest MSME credit platform in India. The company serves more than 225,000 customers across 4,100+ cities and towns in 34 states and Union Territories. By leveraging advanced technology and offering tailored financial solutions, Lendingkart Finance is dedicated to empowering MSMEs and supporting their growth across the nation.

Board Of Directors Of Lendingkart

Lendingkart Finance Limited's Board of Directors comprises experienced professionals guiding the company's strategic direction:

• Mr. T.V. Rao: Chairman and Independent Director.
• Mr. Harshvardhan Lunia: Managing Director.
• Mr. Raichand Lunia: Non-Executive Director.
• Mr. Hong Ping Yeo: Non-Executive Director.
• Mr. Anindo Mukherjee: Non-Executive Director.
• Mr. Pavan Pal Kaushal: Non-Executive Director.
• Mr. Sreeram Iyer: Independent Director.
• Ms. Rashmi Sharma: Additional Non-Executive Independent Director.

This diverse team brings a wealth of expertise to Lendingkart, steering its mission to provide accessible financial solutions to MSMEs across India. Source: Lendingkart¹

Products Offered By Lendingkart

Lendingkart provides a range of financial products designed to meet the needs of small and medium-sized enterprises (SMEs) and individuals. Here are the details:

1. Business Loans

Lendingkart offers collateral-free business loans to help SMEs expand and grow. These loans provide funding of up to INR 2 crore, with repayment terms of up to 36 months. The application process is fully digital, ensuring quick approvals and disbursals.

2. Working Capital Loans

These unsecured loans are designed to help businesses manage day-to-day operational expenses. Businesses can avail of up to INR 2 crore with flexible repayment options of up to 36 months. The fast and seamless online application process ensures funds are available when needed.

3. MSME/SME Loans

Tailored specifically for micro, small, and medium enterprises, these loans offer up to INR 2 crore to address various business needs, including equipment purchase, inventory management, or business expansion.

4. Business Loans for Women

Lendingkart provides unsecured loans for women entrepreneurs, offering financial support of up to INR 2 crore. These loans come with flexible repayment tenures of up to 36 months, empowering women-led businesses to achieve growth.

5. Personal Loans

Lendingkart also extends its financial services to individuals through personal loans. These loans help customers meet personal financial goals such as weddings, medical emergencies, or education. Lendingkart offers flexible repayment options and a paperless process to ensure convenience and speed.

Lendingkart’s commitment to digital-first services ensures quick approvals, fast disbursals, and a user-friendly experience, making it a preferred choice for SMEs and individuals seeking financial assistance.

Source: Lendingkart¹

Technology And Innovation At Lendingkart

Lendingkart leverages cutting-edge technology to simplify and accelerate the loan disbursement process for small and medium enterprises. The company uses a proprietary algorithm to analyse over 5,000 data points from multiple sources, such as banking transactions, credit bureau records, and tax filings. This data-driven approach ensures faster loan approvals with minimal paperwork while maintaining accuracy and efficiency.

The company’s mobile app, Lendingkart App, further enhances the customer experience. With over 1 million downloads on the Google Play Store, the app allows users to apply for loans, check their application status, manage repayments, and access detailed loan information. Its user-friendly interface and robust functionality make it easy for customers to handle their financial needs on the go. Lendingkart’s app plays a vital role in providing a seamless, paperless, and fully digital loan process, making it a preferred choice for businesses across India.

Key Strengths Of Lendingkart

1. Strong Support from Experienced Investors: Since its establishment in 2014, Lendingkart Finance Limited (LFL) has received substantial backing from strategic investors. Fullerton Financial Holdings (FFH) holds the largest stake at 38.16% as of March 31, 2023. FFH has infused INR 722 crore in equity since FY2019 and plays an active role on LFL's board, reflecting strong investor confidence and financial stability.
2. Advanced Digital Platform: Lendingkart operates a branchless model supported by a digital platform developed by Lendingkart Technologies Private Limited (LTPL). The platform uses algorithm-driven credit underwriting that analyses diverse data points. This efficient system ensures a high collection efficiency of 96% as of September 2023, despite being fully digital.
3. Diverse Portfolio Across Sectors: Lendingkart’s portfolio spans more than 25 sectors, ensuring no single sector contributes over 12%. Industries like apparel and industrial goods are the largest contributors, each with a 12% share, which helps maintain a balanced and risk-diversified portfolio.
4. Improved Financial Performance: LFL demonstrated a strong turnaround in FY2023, reporting a net profit of INR 116 crore compared to a net loss of INR 141 crore in FY2022. This improvement was driven by a significant reduction in credit costs, which dropped from 11.9% in FY2022 to 2.2% in FY2023.
5. Strong Capitalization and Liquidity: As of September 30, 2023, Lendingkart had unencumbered cash and cash equivalents of INR 265 crore, with sanctioned but unused lines of INR 86 crore. Additionally, LTPL contributed a liquidity cushion of INR 89 crore. With INR 599 crore in repayment obligations for the six months leading to March 2024, the company is well-capitalized to manage its financial commitments.
6. Financial Covenants: Lendingkart adheres to strict financial covenants, maintaining:
   1. A Capital Adequacy Ratio of at least 20%.
   2. A Debt-to-Equity ratio below 4x.
   3. A Net Non-Performing Asset (NNPA) ratio below 3.5%.
   4. Positive cumulative ALM mismatch across all buckets up to one year.

Source: Audited financial statements of FY’23 and credit rating reports of Lendingkart Finance Limited and management information².

This comprehensive framework of financial discipline, technological innovation, and strategic diversification ensures Lendingkart’s continued growth and resilience in the financial sector.

Financial Snapshot Of Lendingkart

Source: Annual Report of Lendingkart Finance Limited FY’24³

To arrange the capital, Lendingkart also offers corporate bonds. These bonds from the company are secured and are rated by credit rating agencies. On Grip Invest, investors invested in ‘BBB+’ rated bonds of the company that offered fixed returns of up to 13.3%. To invest in similar, rated, regulated and secured corporate bonds sign-up on Grip Invest today and start earning fixed returns:

References:

1. Lendingkart, Accessed from: https://lendingkartfinance.com/board-of-directors
2. Lendingkart Annual Report FY’23, Accessed from: https://media.lendingkart.com/wp-content/uploads/2024/07/Annual-Report-2023.pdf
3. Lendingkart Annual Report FY’24, Accessed from: https://lendingkartfinance.com/wp-content/uploads/2024/09/LFL-Annual-Report-2024.pdf

Want to stay at the top of your finances? 

Join the community of 4 lakh+ investors and learn more about Grip Invest, the latest financial knick-knacks, and shenanigans in the world of investing.

Happy Investing!

Disclaimer - Investments in debt securities/municipal debt securities/securitised debt instruments are subject to risks including delay and/ or default in payment. Read all the offer related documents carefully. The investor is requested to take into consideration all the risk factors before the commencement of trading.
This communication is prepared by Grip Broking Private Limited (bearing SEBI Registration No. INZ000312836 and NSE ID 90319) and/or its affiliate/ group company(ies) (together referred to as “Grip”) and the contents of this disclaimer are applicable to this document and any and all written or oral communication(s) made by Grip or its directors, employees, associates, representatives and agents. This communication does not constitute advice relating to investing or otherwise dealing in securities and is not an offer or solicitation for the purchase or sale of any securities. Grip does not guarantee or assure any return on investments and accepts no liability for consequences of any actions taken based on the information provided. For more details, please visit www.gripinvest.in

Registered Address - 106, II F, New Asiatic Building, H Block, Connaught Place, New Delhi 110001