The Lendingkart Story - Building Bharat through Digital Lending

Technology has transformed the lending industry and today, loans are as custom-made and express delivered as they can get. The days of traditional paperwork have been replaced by digital innovations imparting ease of borrowing to the end consumer. Lendingkart is one such leading entity, revolutionizing lending in the small businesses space in India. With nearly 10k crore of loan disbursals to their credit, their impressive bottom line figures bear testimony to their expanding scale.

Reema Tendulkar gets into an intimate conversation with Harshvardhan Lunia, Founder & CEO of Lendingkart to find out more about the genesis of this fintech brand, achievements so far and aspirations going forward.

Harshvardhan spoke about his journey since he quit his job in London to chase his entrepreneurial dream of starting a debt advisory platform. Having grown up in an environment of family-owned businesses, he expressed his intrigue with small-scale enterprises and how they met their financial needs. Unfortunately, the endeavour did not scale up to his expectations which encouraged him to seek inspiration from companies in US, UK, and China. His research into world-renowned lending businesses, sparked off the vision to adopt a similar modus operandi to service the underserved segments of the Indian market. Thus began the journey of Lendingkart in 2014.

Assessing the requirements of MSMEs, and understanding their challenges in seeking finance, led Lendingkart to create a seamless digital journey right from onboarding to loan disbursals. Secondly, Harshvardhan explained how they tackled information asymmetry with the help of tech, by deploying algorithms to find solves for unique challenges faced by their customers. Lastly, Lendingkart launched a unique approach called zero-touch technology to help customers shed their inhibitions in reaching out to customer care for their requirements. Harshvardhan firmly believes that governance is an inherent aspect of every business, hence audits, compliance, and quality checks are hygiene that helps maintain high-quality business standards.

With the aid of sophisticated algorithms, Lendingkart has built a strong foundation of customer insights. These algorithms help identify trends, customer behavior, borrowing patterns, payment history, and other such sensitive information. Speaking about their robust tech architecture, Harshvardhan proudly stated, “Today we are going to launch version nine of our model, this is one of the most effective of all our models, we have had international investors come and evaluate our model”. Further, enhanced internet penetration and financial inclusion are gradually inducting MSME’s into the formal scheme of things, which has made it easier for them to seek financial aid.

Harshvardhan enumerated several firsts which have ensured Lendingkart stands differentiated in a competitive business environment. The zero-touch technology, a first-of-its-kind experience for consumers leads the pack of differentiation, where a loan application can be completed in less than 5 minutes without interaction with a customer care representative . Algorithm underwriting, another innovative offering decides loan disbursements to customers. The 2gthr platform enables any financial institution to lend to micro and small businesses. xlr8 platform, is an origination engine enabling real-time sourcing, approval, and instant pay-outs. The credit intelligence platform, Cred8, provides MSME’s credit-based scoring. Lendingkart’s proprietary collection engine, Collec10 offers capabilities such as skip-tracing and geo-tagging, which is a far cry from traditional modes of collection. He highlighted that Lendingkart’s core proposition is to simplify the customer’s journey coupled with the right experience and engagement.

Harshvardhan explained how they reverse-engineered the process of solutions by starting with focusing on the product. Understanding how the product fared with consumers, its design, development modalities, and whether it would address the needs of underserved segments, and then went on to develop various solutions. He explained how COVID-19 accelerated the digital adoption of Lendingkart’s services, where large institutions saw merit in exploring the capabilities of digital origination, underwriting, and tech-based collections.

Having delivered almost 10K crore worth of loans in 4k plus cities to 1.5 lac customers, staying the course in a tough segment as the MSME, Harshvardhan explained how Lendingkart proved its mettle and instilled stakeholder confidence in its business model. Backed by an ambitious target of delivering close to $50 billion in the next 10 years, he guesstimates a quantum leap in the MSME financial requirements in India in the coming years. He also emphasised that as an organization they are willing to reinvent in order to achieve its 10-year goals.

On a hopeful note, Harshvardhan concluded,” Lending is not a race to a particular number, we want to keep our heads to the ground, understand our consumers, decode data, study trends in the industry and evaluate growth potential”.