MUMBAI: Online micro-lending platform SMECorner has raised around $7 million (Rs 47.5 crore) from Capital First, existing investor Accion Ventures and a clutch of high net worth individuals.
The capital is a mix of equity and debt — Rs 25 crore in debt and Rs 22.5 crore in equity. Capital First has put in the entire debt portion and infused Rs 12 crore worth of equity investment. Capital First will own a 14.2% stake in SMECorner post this investment.
SMECorner, which enables small and medium enterprises to access loans from banks and NBFCs, will use the capital to scale its loan book by expanding on its offline branches and honing technology platform.
The three-year-old company, which shifted from a marketplace model to an NBFC, having received its licence in February this year, has about 700 customers on its books. It offers loans to small businesses across retail, manufacturing and trade including wholesale and B2B, and has lent Rs 45 crore so far.
Apart from direct access to Capital First’s debt pool for scaling its operations, SMECorner has entered into a strategic arrangement wherein the loans originated by the company will be booked on Capital first’s books with a riskshare agreement in place. SMECorner will get a service fee for the loans. “We want to grow our loan book to about Rs 400 crore by (the end of)FY19 and to Rs 1,500-2,000 crore by FY20. This partnership will help us achieve that scale even as we are in talks with a few B2B platforms to enable loans for their participant vendors thus helping us scale our customer base too,” SMECorner founder Samir Bhatia said.
Bhatia is targeting to expand the client base to 5,000 by the end of this financial year and a loan book of Rs 5,000 crore in three years.
The company currently offers loans to small businesses at interest rates of 19-26% depending on the size of loans, an average of which is about Rs 6 lakh.
A part of the capital is also being used to hone its credit-worthiness analysis technology tools including the Optical Character Recognition (OCR) tool, that analyses data on paper and crunches cash flows immediately. SMECorner which has applied for a patent for this technology, will also enable sharing of its technology tools with Capital First as part of this investment round.