Saturday, July 23, 2016

LendingKart - Cart for Loans

LendingKart is an online financing company founded by Harshvardhan Lunia and Mukul Sachan. It provides working capital loan for short duration to small and medium enterprises. 

It address the pain point of small businessman in traditional banking environment, where they has to undergo numerous evaluation process by bank before receiving funds. 

Lending kart blends banking with technology to interpret data generated during online consumer activities. This big data is analyzed using analytics to determine its lending decision.

Business function

Online Application: SME Vendors wishing to avail loan can fill in online application form. Loans are provided in range of ₹50,000 to ₹1 crores without pledging of any of their assets as collateral for tenure ranging from 1 month to 1 year. 

Low operating cost: Online business model enables lendingkart to keep its operational and distribution cost lower compare to branch model. Further, it operates from offices in Ahmedabad and Bangalore to cater to its customers base across 135 cities across 22 states as of Jun 2016. 

Small employee base: Lendingkart provides loan without collateral, so there is no need for physical verification of collateral. Thereby, it can manage its routine operations with small employee base. 

Technology partner: Lenddo's algorithm uses social media contacts and interactions of borrower and similar information to determine its credit worthiness. This collaboration with Lenddo will enable lendingkart to explore non-financial data for credit scoring evaluation. 

Quick Evaluation Process: The repayment capacity of borrower is evaluated majorly focusing on vendor’s current year cash flows and business growth. Normally, loan is sanctioned in a day and disbursed within next 1-3 days. 

Data Partner: Lendingkart has partnered with e-commerce marketplace website like flipkart, snapdeal, Jabong, Voonik, craftsvilla, CCavenue, PayU and paytm. It has also partnered with offline portal tradeindia. Partnering with these websites provides dual benefits to lendingkart. 
  • Attract larger number of small business that are registered on e-commerce websites 
  • Access e-commerce sellers quantative details like number of transactions carried out, annual turnover, cash flow and qualitative details like quality of its product, efficiency in responding to customers, ability to compete in markeplace. 
  • It analyzes the credit worthiness of its borrowers based on approx 2,200 qualitative and quantitative parameters that it obtains from e-commerce platform, and thereby arrives at its lending decision.

Pictorial representation based on publicly available information. Icon obtained from Board of Innovation

 Revenue Model

  • Lending cart charges interest of 1.5% - 2% per month to its borrowers, which is equivalent to interest rate of 18 - 24% per annum.
  • All loan are funds and sanctioned by LendingKart affiliate NBFCs.
  • Borrower pays one time processing charges of 1% of the sanctioned amount. Further, there are no pre-closure charges
  • Borrowers can pay interest or repay principal either biweekly or monthly
  • LendingKart witness 20% month-over-month growth in loan origination during 2014 - 2016. As per Techportal report Lendingkart disburses around 70 short term loans every month.

Funds raised

With the recent round of funding, the company has in total raised Rs. 260 crore ($41 million) till date.
So, go online for cash too

Source: LendingKart website and leading newspaper namely, Livemint, Yourstory, TimesofIndia, Economic Times, Moneycontrol