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The RBI-registered online lending platform LivFin targets to double asset under management to ₹800 crore by next March.
Of the overall pie, the co-lending portion is set to increase from ₹80 crore to ₹320 crore as the company has onboarded additional co-lenders in the June quarter.
The company is disbursing over ₹120 crore a month and expects to touch ₹2,000 crore in the current financial year.
LivFin offers supply chain finance, small business loans and working capital to MSMEs and collaborates with mid- to large-sized corporations to develop structures to lend to their suppliers and vendors on the one hand, and their distributors, dealers and retailers on the other.
Uptick in online lending
Asked why there has been an uptick in online lending while bank borrowings are almost flat, Rahul Chander, Managing Director, LivFin said online borrowing has become very attractive for small loans, whether for personal use or for small businesses, primarily given the ease of transaction and quick approval. Given the fact that all relevant details of a potential borrower are now available in real time to lenders, the process of credit evaluation is almost instantaneous, he said.
Most NBFCs also do documentation online and disburse the loan amount immediately on document execution, thereby providing the funds needed on time, he added.
NBFCs also provide repayment flexibility, thereby allowing borrowers to align repayment to future availability of cashflows. Although the processes at most banks have improved significantly, it is still more tedious than the NBFCs.
While NBFCs do charge a higher rate of interest compared to banks, most borrowers are willing to pay that in exchange for timely receipt of funds and the ease of availing of the same, said Chander.
The company serves as a bridge between lenders and borrowers by revolutionising the way credit is evaluated and delivered to the target market, as the majority of small and medium-sized businesses in India are hampered by the lack of interest of banks and NBFCs in lending to them.
LivFin’s technology-driven credit decision-making system, which utilises alternative data sources, expedites the provision of financing solutions to under-banked MSMEs.
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