Fullerton Capital-backed Lendingkart doubled its profit to Rs 42 crore in financial year 2020, expanding its loan book by 80% to Rs 2,400 crore in the period.
The lender, which predominantly caters to small and medium businesses and retail borrowers, grew interest income by 113% to Rs 465 crore against the same period in financial year 2019.
However, Covid-19 related uncertainties could strain company’s margins in the ongoing fiscal year as new disbursals are significantly lower than pre-pandemic days.
According Harshvardhan Lunia, the managing director and cofounder of the non-bank lender, sanctions are 50% lower than in January-February when the company was disbursing Rs 300 crore worth loans every month.
“We are anticipating full recovery by March or April next year,” Lunia told ET. “However, the one thing about this situation is that we anticipate recovery and damage is not lasting like in the event of a flood or natural catastrophe.”
The fintech lender has raised Rs 319 crore in the last 12 months, predominantly led by Temasek-backed Fullerton.
Lunia said the equity infusion was purely for growth and that the non-bank’s business model is self-sustained.
“Over the last two years, since the IL&FS and DHFL defaults, banks have been reluctant to directly lend to small businesses. This has opened up avenues for us to expand our book,” said Lunia, adding that the lender has taken a ‘co-lending’ approach to access liquidity for incremental sanctions.
Additionally, the lender has also benefited from several government schemes, including the Credit Guarantee Scheme, where defaults in select borrower categories are protected up to a threshold by the central government.
“Our goal is to address the working capital fund gap prevalent in India’s high potential micro and small enterprises, to promote financial inclusion and accessibility through our digital channels,” Lunia said.