New Delhi: Co-founder of the travel agency EaseMyTrip Prashant Pitti is developing his third venture, a co-lending platform offering MSMEs in rural India collateral-free loans. Pitti, who established the dating app profoundly in 2017, also tweeted the news on Monday.
“Have been thinking to start something impactful at the grassroots level (and run it alongside EaseMyTrip). Finally, starting a co-lending platform (and NBFC), to serve the highly underserved MSME market, by offering collateral-free business loans in rural India. Looking to hire 100+ folks for various roles (based out of Bangalore) in risk, credit, finance, hr, ops, sales, digital, tech, etc.” he tweeted.
“The new venture is named Optimo and it is a matter of around a month for it to launch. The idea is to make an impact on a larger level in the underserved MSME space,” a person aware of the new venture told in reports Aspire on anonymity.
Even while bank credit supplied to MSMEs has continued to rise year over year, easy access to inexpensive credit remains the primary obstacle to their expansion. According to official figures, the total amount of bank credit given to MSMEs increased by 12.7% from FY21 and 24.6% from FY20 to FY22.
According to figures from the RBI, the MSME sector received Rs 20.20 lakh crore in bank credit under priority sector lending in May of this year, or 14.5 of the country’s total non-food bank credit worth Rs 138.5 lakh billion.
However, according to a June 2019 report by the UK Sinha Committee constituted by the RBI, an estimated Rs 20-25 lakh crore credit gap existed in the MSME sector while a recent paper by investment banking company Avendus Capital had estimated an astounding credit gap of $530 billion in the MSME sector.
Co-lending as a business model has gained traction in the nation because it enables NBFCs to access less expensive funding sources, lowering their risk exposure and ultimately lowering their cost of funds and allowing banks to diversify their portfolios. Yubi, U GRO capital, Avanti Finance, and other co-lending participants can be found in India.
Notably, after public sector banks alone disclosed a co-lending portfolio of Rs 25414 crore in FY23, reported in April this year, banks and NBFCs could sign co-lending agreements worth Rs 1 trillion in the current financial year.
