NBFC startup ZipLoan, which offers small pocket loans to MSME, has raised Rs 90 crore from Saif Partners and other investors. The other investors include existing investors Matrix Partners India, Waterbridge Ventures and Whiteboard Capital.
ZipLoan will use fresh capital infusion for expanding its geographical reach and also to increase sales and tech workforce. Currently, the startup’s geographical outreach is restricted to only Delhi NCR, Mumbai, Indore, Lucknow, Dehradun and Jaipur.
According to Economic Times, the company is also planning to raise another Rs 250 crore through debt in coming months.
ZipLoan claims that it can process loan worth Rs 5 lakh to MSME enterprises in matter of few days. It has so far serviced loans to nearly 3,500 small and micro-entrepreneurs, the company further claims. The company also maintains that its Non-Performing Assets (NPAs) are well under control, with NPAs staying well within 2%.
Focus on India’s fintech sector
The digital disruption during the last few years has unarguably opened window of opportunities for NBFCs. The banking sector’s inherent limitation to lend credit to small entrepreneurs and unqualified borrowers has also played a helping hand.
According to a 2018 BCG report, India’s fintech sector can become a whopping $1 Tn opportunity in the next five years. The optimism is equally reflective on funding front, with fintech emerging as one of the most funded sector in 2018.
However, the fintech companies will have to be mindful about NPAs. The recent NPA fiasco that has casted its shadow on India’s banking sector should offer some valuable lessons to India’s fintech industry. Probably the most important lesson that fintech players can draw is that the quality and not quantity of loan portfolio matters the most. All said, exciting times lies ahead for most fintech players.