Money & Banking

Infibeam eyes short-term lending for SMEs, merchants

Our Bureau Ahmedabad | Updated on August 10, 2021

Plans to provide NBFCs, banks AI algorithms, merchant data, framework for the service

Payment gateway and e-commerce platform service provider Infibeam Avenues Limited has forayed into the short to medium-term credit/lending services for merchant establishments and small businesses. It will partner with banks and non-banking finance companies (NBFCs) for the same.

The AI and data-driven technology platform will facilitate banks and NBFCs to tap the short-term and medium-term credit requirements of the SMEs, MSMEs and merchants for a duration of three months to 18 months.

The company looks at lending as an enabler by offering credit algorithm, credit platform, frameworks and merchant database.

Speaking to Businessline, R Srikanth, Global President - Finance and Investor Relations - Infibeam Avenues, said the company will continue investing in the platform for the current year, while it looks at revenues to start flowing from next fiscal.

“We are getting into this AI-driven credit and lending space from this quarter onward. As a payments gateway player, we can't get exposed to the credit risk, so we will need to have bank and NBFC to take the credit risk. We will provide them with the tech solutions and framework,” said Srikanth.

The global market for short-term lending business is estimated at about $100 billion. “Even with a 1 per cent share from that market will give us a big loan portfolio," he added. Currently, Infibeam has over 3 million merchants on Infibeam’s platform and it looks to reach 10-million mark soon.

The company plans to keep the new business asset-light and digital-only, targeting merchants in factoring (bill discounting) business.

With the recent passing of factoring law amendments, enabling more than 9,000 non-banking financial companies (NBFCs) to participate in the factoring (bill discounting), Infibeam Avenues has set its course to tap the Indian factoring market space, which is estimated to be worth $6 billion.

Srikanth also added that with the government push and increased adoption for digital bill payments, the company registered highest-ever quarterly volume of 55 million transactions for the April-June period. In July-September 2020, the volumes had touched 50 million.

"The market is very supportive. And with strong push for digital economy, we are seeing physical stores getting converted into online retailing. Currently, the share of digital transactions is 18 per cent and non-digital is 82 per cent. Now more people are shifting from non-digital to digital and the biggest beneficiaries of this trend is the payment gateway companies," said Srikanth.

At the 55 million transactions for the current quarter, company reported processing value of ₹50,000 crore. On consolidated basis, company's net revenues for the quarter grew 3 per cent to ₹52 crore against ₹51 crore in the corresponding quarter last year. Consolidated profit after tax increased 14 per cent to ₹13 crore for the quarter against ₹12 crore in the same period last year.

Infibeam Avenues shares were down 2.7 per cent on the BSE to close at ₹43.30 on Tuesday.

Published on August 10, 2021

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