Online financing portal Flexiloans is planning to tap the large unorganised businesses in India.

According to an industry report, about 94 per cent of the MSMEs (micro and small medium enterprises) are unorganised and do not have any credit score or bank account and are almost not considered creditworthy by financial institutions or lending platforms.

“However, this segment (unorganised MSMEs) forms about 93 per cent of the total $300-billion lending market and hence, is a big business opportunity for us, as no bank wants to touch this segment fearing defaults,” Flexiloans Co-founder Manish Lunia told BusinessLine .

The Mumbai-based start-up was promoted by three Indian School of Business alumni — Deepak Jain, Manish Lunia, Ritesh Jain (former CFO of — and an IIT Bombay alumnus, Abhishek Kothari, in January 2016.

The company has raised about ₹100 crore in its first round itself from financial industry stalwarts Sanjay Nayar, CEO of private equity firm KKR, Vikram Sud, former head of ops and technology at Citibank, Anil Jaggia, Chief Investment Officer at HDFC Bank, and Narayan Seshadri, a former MD of KPMG’s advisory business.

Lunia said that the platform has already processed about 5,000 loans (of ticket size ranging from ₹20,000 to ₹75 lakh) to small businesses in about 60 Indian cities in the last one year. The plan is to double loan disbursal in the next one year and tap 200 cities, Lunia added.

It has also partnered with over 20 national digital marketplaces and organisations, such as Flipkart, Ola and Shopclues to tap over two million small businesses across 18 cities and towns.

Growing at 250 per cent month on month, Flexiloans offers loans at interest rates as high as 25 per cent and yet has not got a single defaulter so far, which, according to Lunia. is because customers use the loans as working capital and have limited access to any other mode of financial resources or support from banking institutions. The company, which sanctions loans in just 48 hours, learns about its customers through data scrapping and from profiles on social media.

The company gets revenue also from the one-time processing fee of 0-2 per cent that it charges on every loan sanctioned.

Overseas market

Ritesh Jain, another co-founder, said that though there is ample opportunity in the Indian market, the start-up is also meanwhile looking to expand into under-served markets in South-East Asia. He, however, did not give a timeframe from the same.

The company has tied up with NBFCs to further expand its bandwidth to lend.