RBI Tightens P2P Lending Rules As Several Lending Platforms Violating Norms

The Reserve Bank of India (RBI) has recently tightened regulations for peer-to-peer (P2P) lending platforms to enhance transparency and protect investors.

The Central Bank has reviewed and updated the Master Direction for Non-Banking Financial Company – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017.

According to the recent circular, RBI said some of the entities adopted certain practices which are in violation of its regulations. “Such practices include, among others, violation of the prescribed funds transfer mechanism, promoting peer-to-peer lending as an investment product with features like tenure-linked assured minimum returns, providing liquidity options and at times acting like deposit takers and lenders, instead of being a platform,” it said.

The original master direction on NBFC – P2P lending platform (Reserve Bank) Directions, 2017, laid out clear rules for the operation of P2P lending platforms which serve as intermediaries in facilitating online transactions between lenders and borrowers.

However, RBI said it observed deviations from these rules, including violations related to funds transfer mechanisms, promoting P2P lending as an investment product, and practices resembling deposit-taking. To address these concerns, RBI revised and clarified several provisions of the directions

Here are the key changes, RBI has made

1. Credit Risk Prohibition: P2P platforms are now prohibited from assuming any credit risks. 

2. No Credit Enhancements or Guarantees: These platforms cannot offer credit enhancements or provide guarantees.

3. Investment Cap: Individual lenders are restricted from investing more than ₹50 lakh cumulatively through P2P platforms.

4. Disclosure Requirements: Platforms must disclose any losses borne by lenders on principal or interest.

5. Prohibition on Cross-Selling: P2P platforms cannot cross-sell insurance products related to credit enhancement or guarantees.

These updates aim to create a safer and more transparent environment for both lenders and borrowers.

Instant Loan Against Mutual Funds Platform Volt Money Raises $1.5 Mn in Pre-Seed Led by Titan Capital and All In Capital

Volt Money, a leading platform for instant secured loans against mutual funds, has announced a pre-seed fundraising round of $1.5 million today. Using Volt Money, mutual fund investors can unlock cash in 10 minutes at favorable terms such as low interest rates, interest-only EMIs & no pre-payment charges. Volt Money is disrupting instant secured loans for 10 crore investors with 40 lakh crore investment to easily meet short-term cash requirements without compromising long-term financial goals.

The fundraising featured participation from numerous renowned investors including Titan Capital, All In Capital, Praveen Jadhav of Raise Ventures, Aditi Kothari of DSP Adiko Holdings, Gemba Capital, Kunal Shah of Cred, & Ashish Kehair & Rahul Jain from Nuvama Wealth. The funding will be strategically used to recruit key personnel for product development and to establish beneficial partnerships.

Lalit Bihani, Co-Founder & CEO of Volt Money, said, "We're at the cusp of disruption of instant secured loans in India. With the advanced digital infrastructures for KYC, account aggregator, and pledging capabilities, we're ideally positioned to seize a unique & very large opportunity. We're grateful for the trust our investors have placed in us."

Highlighting Volt Money's value proposition, Bipin Shah of Titan Capital noted, "Volt Money's innovative approach to offer seamless liquidity against financial savings is an essential service for today's investors. The early traction from customers and partners demonstrates a strong market fit for Volt Money's platform."

The Association of Mutual Funds in India (AMFI) indicates that 55% of mutual fund investments are liquidated within the first two years, robbing investors of the opportunity for compounding returns over time. Volt Money seeks to rectify this by offering attractive loan terms such as low interest rates, interest-only EMIs, and zero prepayment charges.

Volt Money is demonstrating industry leadership with its frictionless digital approach to securing loans against mutual funds. As Praveen Jadhav of Raise Ventures observes, "We recognize the immense potential of Volt Money's mission to empower 10 crore investors to obtain instant secured loans, setting the stage for long-term wealth creation. The experienced founding team at Volt Money brings a strong combination of skills and expertise to spearhead this innovation."

Volt Money's journey began in April 2022, led by Lalit Bihani, Ankit Agarwal and Bharat Lamba, three IIT Delhi graduates who have shared a friendship since 2008. In January 2023, they onboarded Bajaj Finserv Limited, India’s leading NBFC to launch a seamless digital journey for end-end process. Today, the company has successfully served customers across more than 80 cities with loans ranging from Rs. 25,000 to Rs. 2 Crores..

About Volt Money:

Volt Money is a visionary platform transforming the way instant and secured loans are provided against mutual funds and shares. The company collaborates with top-rated lenders and distribution partners to offer customers hassle-free, instant secured loans with favorable terms. Their mission is to empower 10 crore savvy investors to meet short-term cash needs without compromising on long-term goals.

For more information, please visit www.voltmoney.in

New Fair Lending Disclosure Guidelines to Enhance Trust Among Stakeholders: Fintech Convergence Council

The Fintech Convergence Council (FCC) welcomes the recent announcement by the Reserve Bank of India (RBI) introducing the Fair Lending Disclosure Guidelines (FLDG). These guidelines mark a pivotal moment in the evolution of the digital lending landscape, and the FCC acknowledges the positive impact they will have on the industry.

The FLDG are set to accelerate digital lending by fintech companies and anticipate a significant surge in funding for digital lending fintech. The digital lending segment witnessed remarkable investment inflows in 2022, and the FLDG will undoubtedly fuel its continued growth.

The FCC recognizes the importance of establishing proper frameworks within the banking sector to ensure compliance with the FLDG. These guidelines will empower banks to implement efficient processes that adhere to the regulatory framework while enabling them to scale their partner-led digital lending initiatives effectively.

Mr. Navin Surya, Chairman, Fintech Convergence Council, said, "The RBI's circular on Default Loss Guarantee arrangements in digital lending reflects their commitment to fostering innovation while ensuring responsible risk management. By conducting extensive consultations and issuing detailed guidelines separately, the RBI establishes a transparent and comprehensive regulatory framework, promoting trust and confidence in the digital lending ecosystem. This move will not only boost credit penetration but also encourage collaboration between fintech and regulated entities for the benefit of the economy."

One key aspect of the FLDG is the emphasis on increased transparency within the lending ecosystem. Lending service providers (LSPs) will now be required to disclose all their relationships and portfolios, including any defaults, to relevant entities (REs). This heightened transparency will foster greater trust among stakeholders and enhance accountability within the industry.

While the guidelines may expose LSP-RE agreements to scrutiny by competitors, the FCC believes that this will encourage healthy competition and drive further improvements in the lending sector. The guidelines offer an opportunity for fintech companies to showcase their capabilities and maintain high standards while ensuring fair lending practices.

The FCC commends the Reserve Bank of India for its proactive approach to implementing the FLDG, which will undoubtedly shape the future of digital lending in India. These guidelines will empower stakeholders to embrace innovation, strengthen partnerships, and foster a transparent and resilient lending ecosystem.

About Fintech Convergence Council

The Fintech Convergence Council (FCC) was formed in 2018 to represent the positions of various regulated financial service providers and fintech companies regarding different issues. The FCC today represents over 100 members coming from different domains of the industry such as digital lending, wealth management, insurance, digital financial service providers, Regtech, Agritech and Bureaus.

The FCC has been at the forefront of public policy advocacy for the above-mentioned domains including the curation of thought leadership content. The council focuses on resolving various sector-specific challenges before the industry and aims at being a platform for all the stakeholders in the financial services (BFSI) ecosystem with an agenda to deliberate pertinent issues, integrate multiple voices and ensure the development of the fintech sector.

Website- https://www.fintechcouncil.in/about-fcc.php

U GRO Capital's AUM Crosses INR 3,650 crore, with highest ever disbursement of INR 1,350 crore in Q1 FY23

• Off-book AUM stands at ~INR 750 crore (21% as on June 30, 2022)
• Pioneered ‘Lending as a Service’ model backed by robust data and technology architecture
• Customer base at 25,000+ as of June 30, 2022

U GRO Capital, a listed, MSME lending fintech platform, continues its growth momentum with an AUM of INR 3,656 crore as of June 30, 2022 (+166% compared to June 30, 2021) and is on track to cross the mark of INR 7,000 crore AUM by March 2023.

The company has effectively demonstrated the power of co-lending, after having kicked off this stream by experimenting with top Public Sector Banks. The current off-book AUM stands at ~INR 750 crore (21% as on June 30, 2022). The company aims to grow its loan book under co-lending partnerships by 3X to over INR 2,000 crore by March 2023.

U GRO Capital has pioneered ‘Lending as a Service (LaaS)’ model and is revolutionizing MSME lending through its data analytics prowess and robust technology architecture. As a testimony to the same, U GRO Capital’s proprietary scoring model (GRO Score) has successfully processed 21,000+ applications, 67,000+ bureau records, 45,000+ bank statements and 14,500+ GST records in the last one year.

Key performance highlights for Q1 FY23

• Loan Portfolio: Loan and Income Growth, Portfolio quality
• AUM of INR 3,656 crore (+166% compared to Q1’FY22 and +23% compared to Q4’FY22)
• INR 1,359 crore of Gross Loans originated in Q1’FY23 (+311% compared to Q1’FY22 and +41% compared to Q4’FY22)
• Total Income stood at INR 123.8 crore (+141.4% compared to Q1’FY22 and +8.4% compared to Q4’FY22)
• Profit before tax (PBT) increased to 10.4 crore (+340.6% compared to Q1’FY22 and +29.3% as compared to Q4’FY22)
• Profit after tax (PAT) increased to 7.3 crore (+329.4% compared to Q1’FY22 and +20.7% as compared to Q4’FY22)
• GNPA/ NNPA as on Jun’22 stood at 1.7% /1.2% (As a % of Total AUM)
• Liability and Liquidity Position
• Total lender count increased to 63 as on Jun’22, added 8 new lenders during Q1’FY23
• Total Debt stood at INR 2,208 crore as on Jun’22, and overall debt to equity ratio was 2.26x
• Healthy capital position with CRAR of 28% (as on Jun’22)
• Branch, Customer Network and Employee Strength
• 25,000+ customers as on Jun’22 (+5,000 customers in Q1FY23)
• 96 branches (as on Jun’22), addition of 5 new branches during the quarter
• 1,275+ Employees as on Jun’22, net employee addition of 165+ during Q1’FY23

Brief financial snapshot:

Particulars	Q1’22	Q4’22	Q1’23	Growth (Y-o-Y)	Growth (Q-o-Q)
Total Income	51.3	114.2	123.8	141.3%	8.4%
Interest Expense	22.4	49.7	53.1	137%	6.9%
Net Total Income	28.9	64.5	70.7	144.6%	9.6%
Operating Expenses	21.6	47.3	51.0	136.1%	7.9%
Impairment on Financial Instruments	4.9	9.3	9.4	91.8%	1.0%
PBT	2.4	8.0	10.4	333.3%	29.3%
PAT	1.7	6.1	7.3	329.4%	20.7%

Commenting on the results, Mr. Shachindra Nath, Vice Chairman and Managing Director of U GRO Capital stated, “U GRO Capital is at the forefront of using data analytics and technology to serve the underserved MSME segment. We have been pioneers of ‘Lending as a service’ by harnessing the power of Co-lending/ Co-origination models and steering the company towards transitioning into a lending platform through off-balance sheet AUM approach. Operational efficiencies have started to kick in with improving profitability with each passing quarter. The company is on track to achieve AUM of INR 20,000 crore by 2025, as we achieved our highest ever disbursement in Q1 FY23.”

About U GRO Capital Ltd

U GRO Capital limited is a listed (NSE, BSE), MSME lending fintech platform. U GRO Capital’s mission is ‘Solve the Unsolved’ – Small Business Credit Need with its omnichannel distribution model combining physical and digital journey of the customer. The Company envisions to spearhead India’s transition of MSME lending market to the new age of on-tap financing. It uses the emerging Data Tripod of GST, Banking and Bureau coupled with its sectoral analysis to solve the problem of credit for small businesses.

U GRO aspires to serve one million small businesses with an asset book of 1% of outstanding MSME credit of India as its first milestone.

Technology underpins every aspect of U GRO’s lending process, from API integrations, sectoral and sub-sectoral statistical scorecards, state-of-the-art AI/ML credit underwriting engine combining bank, bureau and GST statement analyzers, automated policy approvals, and machine learning OCR technology. Company’s GRO Extreme platform empowers fintech and other institutional platforms to deepen their distribution reach through a plug and play API driven seamless integration with U GRO. The company has developed full tech stack to fully automate the complete life cycle of a loan right from origination to collection during the entire customer journey.

The Company has raised ~₹ 3,000+ crore of equity & debt capital from marquee Private Equity Investors, Family Offices, Banks and other Financial Institution over last 3 years.

PAISALO and UCO Bank to Enable AGRI and Allied AGRI with Small Ticket Size Income Generation Loans

In recent years, AGRI and Allied AGRI have come out and blossomed to become great leaders and have set new heights of growth and progress for society in general. There still is a lot of room for growth and success for this very talented population. With the right amount of support, we can aim to have many AGRI, Allied AGRI, and women leaders in the near future. To contribute to this vision of empowering the AGRI and Allied AGRI, Paisalo Digital Limited signed a co-lending loan agreement with the UCO Bank today. This agreement is in conformity with the latest RBI circular on co-lending of loans as released on 05 November 2020.

UCO Bank-Paisalo's co-lending platform will leverage UCO Bank’s low cost of funds on the liability side and Paisalo’s origination, rule engine, and underwriting capabilities on the asset side, with the help of Paisalo’s digital platform for sourcing, servicing and recovery of these income generation priority sector loans.

 

Santanu Agarwal, Deputy Managing Director, Paisalo Digital Limited says, “Paisalo sees a huge opportunity and is well-positioned to capitalize on the huge Rs. 8 lakh crore market of small-ticket loans for our 365 million underbanked and under-serviced population. UCO Bank and Paisalo co-lending product is a big step towards Paisalo’s goal of creating the most competitive and seamless banking solution for India's Bottom of Pyramid Population.”

Speaking on the occasion Mr. Soma Sankara Prasad, MD & CEO of UCO Bank says, “co-lending arrangement is one of the new avenues of lending. The tie-up will give a boost to the agriculture advance of the Bank and it is a win-win situation for the bank as well as NBFC with benefit reaching to those at the bottom of the society.”

Executive Director Ishraq Ali Khan expressed that this is a great beginning for UCO Bank under the agriculture segment through a co-lending arrangement.

About Paisalo Digital Limited:

PAISALO DIGITAL LIMITED (BSE: PAISALO | NSE: PAISALO | BLOOMBERG: PAISALO: IN | ISIN:INE420C01042) is a leading Systemically Important Non-Deposit taking NBFC registered with the Reserve Bank of India.

PAISALO is at the forefront of digital lending, a well-governed, listed Fintech player with a strong distribution network in rural and semi-urban parts of India. The company is a leader in seamless credit distribution, services, and management of small-ticket loans in a Co-Lending tie-up with SBI, BOB, and PNB; with the objective of promoting rural development, self-employment, and women empowerment. PAISALO offers income-generating unsecured loans from INR 10,000 to 3,00,000 through the Individual and Joint lending model provided to entrepreneurs under Priority Sector Lending. The company has served over 1,500,000 borrowers.

About UCO Bank:

Founded on 6th January 1943 by Mr. G.D. Birla, UCO Bank is a commercial bank and Government of India Undertaking. The Bank serves its huge global customer base of over 3074 branches. UCO Bank, with years of dedicated service to the Nation through active financial participation in all segments of the economy- Agriculture, Industry, Trade & Commerce, Service Sector, etc. UCO Bank has marched into the 21st century matched with dynamism and growth.

Digital-Lending NBFC Clix Capital Disburses INR 15,000 Cr in 5 Yrs; Plans to Lend More Than INR 4,000 Crore in Fy2022-23

Clix Capital Services Pvt Ltd (‘Clix Capital’), one of India’s leading digital-lending NBFCs, today announced that it will disburse more than INR 4,000 crore in FY 2022-23. It also announced that the company has crossed the INR 15,000 crore disbursement milestone since its rechristening from GE Capital 5 years ago.

Clix Capital has been servicing individual borrowers and MSMEs and has given out more than 50 lac loans till date. A majority of the company’s disbursements have gone to MSMEs who have received about 48% of these funds. With a month-on-month targeted disbursal rate of more than INR 350 crore, the leading NBFC is well on its course to disburse over INR 4,000 crore in the next fiscal.

On setting up this ambitious target for the coming year, Rakesh Kaul, CEO – Clix Capital, said: “We have set a target of disbursing over INR 4,000 crore for FY 2022-23 and we are very much on course for that. Ever since our inception, we have been redefining the lending space in India by creating products and services that meet the financial needs of our customers. Today, Clix Capital has created history by disbursing INR 15,000 crore to individuals and businesses since we started 5 years ago. Over the years we have expanded our ecosystem and we have serviced individual borrowers and funded across sectors, and will continue to do so. Our vision lies in simplifying lending and enabling financial inclusion for all people. We have succeeded in this mission having touched over 50 lacs customer lives in our journey till date."

Customer convenience and satisfaction is at the core of Clix Capital’s operations. It follows a proprietary AI and data analytics-enabled underwriting model for segmentation and due diligence to determine customer eligibility within minutes. Clix has invested significantly in crafting a complete end-to-end digital journey for its consumers, where a customer can receive the loan in his/her bank account within minutes. This smooth customer journey is poised to be a great future enabler for Clix Capital towards serving customers who are finding it difficult to procure loans from traditional lenders.

About Clix Capital

Clix Capital is a new age NBFC revolutionizing the lending space by offering differentiated digital lending products that are driven by technology and deep analytics. It offers a range of lending products to a varied spectrum of customers across the MSME and consumer segment, including personal loans, MSME loans, healthcare loans, and mortgage finance.

Clix is co-founded by industry veterans Mr. Pramod Bhasin and Mr. Anil Chawla and is backed by a private equity fund AION Capital Partners Limited (an affiliate of Apollo Global Management, LLC – one of the largest alternate investment managers globally with AUM of $433 billion). Mr. Bhasin is the founder of Genpact and the former CEO of GE Capital India and Asia; and Mr. Chawla has been the former CEO of GE Capital India and Asia’s Commercial Finance Business.

Together Mr. Bhasin, Mr. Chawla and AION jointly acquired the commercial lending and leasing business of GE Capital India in September 2016 and rechristened it Clix Capital.

100X.VC-backed Lending Platform Pocketly Raises $3 Mn in Pre-series A Round From Marquee Investors

Bengaluru-based Fintech Lending Platform Pocketly, a 100X.VC Class 01 portfolio, has raised USD 3 million in Debt and Equity as part of its Pre-Series A round. The round was led by Dholakia Ventures, it also had participation from notable Angels like Kunal Shah, Apurva Parekh (Pidilite), Siddharth Somaiya (Organic Riot) and Aaryaman Vir Shah.

Pocketly provides a credit line with a fully digital and automated process through its platform for young adults underserved by Banks and has grown 10x in the last year. Pocketly is now serving over 100k+ borrowers and is currently disbursing more than INR 250 Cr annually. The round was a mix of equity ($1M) and Debt ($2M).

"Pocketly in its current form provides credit to students and young professionals in India through our credit line product, but going forward we are exploring multiple options to meet the various demands of our users in the form of card or BNPL. We are sure that this fundraise will give us fuel to continue on our growth trajectory and help us build better products and give superior experience to our users," added Navdeesh Ahuja, Founder, Pocketly.

"We are keen on businesses that are built on sound unit economics and yet scalable, and Pocketly has proven to do so. With the sustained focus and momentum, we see the platform becoming a mainstream fintech lending solution in India. We have high conviction in the company which is showcased by us investing thrice in a matter of 15 months,” said Dravya Dholakia, CEO, Dholakia Ventures.

"Pocketly makes it possible for the young India to access credit, which was not possible through existing traditional routes. At 100X.VC, we are excited to partner Pocketly and fuel their journey of empowering the youngest population in the world", said Ninad Karpe, Partner, 100X.VC.

Further, the FinTech lender is expecting to scale its disbursement to 1,000 crores in the next 12 months and has partnered with multiple NBFCs to support this growth. Pocketly currently has a user base of more than 7 lakh, of whom more than 1 lakh have availed credit from the company.

U GRO Capital Impact Financing Get Endorsement of Swiss-based responsAbility through a Debt Investment of INR 138 Crores

U GRO Capital, a listed, small business lending MSME focused fintech platform raised its first impact focused debt investment of INR 138 cr from funds managed/ advised by Switzerland based impact investor responsAbility. The transaction was structured in two legs - in the first leg, an INR 31 Cr equivalent USD-denominated ECB was raised which was followed by INR denominated NCDs totalling INR 107crs in the second leg.

The ECB transaction was done via an innovative social bond structure created as a result of joint efforts of the Swedish International Development Agency (SIDA), responsAbility and Danske bank to mobilize USD 177.5 Mn of debt capital from private investors. These entities joined forces to contribute to the Sustainable Development Goals of the UN 2030 agenda and launched a social bond that bundles loans to innovate companies in capital scarce regions operating in in the financial inclusion, healthcare and WASH (water, sanitation, hygiene), agriculture and climate finance sectors, and that have a measurable, positive social impact.

The ECB transaction was completed in record time of 3 months.

U GRO Capital aspires to become the largest MSME platform in India and this transaction which brings in support of DFIs to its overall objectives reaffirms the faith of its 50+ lenders in its business model. This transaction is the first of its kind for U GRO Capital and is expected to provide a boost to the overall targets it wants to achieve; the company will be looking forward to many such transactions over the coming years.

Mr. Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital said, “This partnership marks a milestone in our journey as we share a common vision of financial inclusion with responsAbility and we continue to expand our reach and scope. DFIs and impact investors are critical funding partners to help us bridge the MSME credit gap in India and with this transaction, we have been able to affirm impact investors’ confidence in our business model. This transaction opens up a new stream of debt financing for us as we continue to leverage our technology and credit expertise to service MSMEs across the spectrum through our multi-channel distribution model.”

Rudrashis Roy, Investment Officer – Financial Institutions Debt, responsAbility said, “India continues to be an important market for funds managed or advised by responsAbility and we are excited to work with a like-minded partner like U GRO Capital to improve access to finance in the country. We were impressed with the way U GRO Capital has been able to offer credit products across the entire MSME spectrum through a multi-channel distribution strategy and how it is trying to solve problems related to data availability and quality in MSME underwriting through the use of technology and data analytics.”

The proceeds will serve as crucial funding to the Micro, Small and Medium Enterprises (MSME) segment in India. Lending to U GRO Capital directly contributes to the UN Sustainable Development Goals (SDGs) in a large economy characterized by a large lending gap for Small and Mid-Sized Enterprises that hinders job creation, fuels inequality, and stifles economic development

U GRO Capital currently has 75 branches across 9 states. It aims to expand the branch network to 100 by FY2022 and intends to reach 250,000 MSMEs in the coming 4 financial years.

About U GRO Capital Ltd.

U GRO Capital limited is a listed (NSE, BSE), MSME lending fintech platform. U GRO Capital’s mission is ‘Solve the Unsolved’ – Small Business Credit Need with its omnichannel distribution model combining physical and digital journey of the customer. The Company envisions to spearhead India’s transition of MSME lending market to the new age of on-tap financing. It uses the emerging Data Tripod of GST, Banking and Bureau coupled with its sectoral analysis to solve the problem of credit for small businesses.

U GRO Capital aspires to serve one million small businesses with an asset book of 1% of outstanding MSME credit of India as its first milestone.

Technology underpins every aspect of U GRO Capital’s lending process, from API integrations, sectoral and sub-sectoral statistical scorecards, state-of-the-art AI/ML credit underwriting engine combining bank, bureau and GST statement analysers, automated policy approvals, and machine learning OCR technology. Company’s GRO Extreme platform empowers fintech and other institutional platforms to deepen their distribution reach through a plug and play API driven seamless integration with U GRO Capital. The company has developed full tech stack to fully automate the complete life cycle of a loan right from origination to collection during the entire customer journey.

The company has raised ~INR 2500 crore of equity & debt capital from marquee private equity investors, family offices, banks and other financial institutions over the last 3 years.

About responsAbility

responsAbility has invested over USD 11 billion in emerging markets since 2003, and as an impact asset manager, focuses on climate finance, sustainable food production, and financial inclusion. It works closely with players in local markets, as it maintains offices around the globe, in order to strategically take steps to directly contribute to reaching the UN’s Sustainable Development Goals. Currently, responsAbility manages USD 3.7 billion in assets invested in over 300 ESG-vetted high-impact companies in nearly 80 countries.

On January 27, 2022, M&G plc, the international savings and investments business, announced that it has agreed to acquire a majority stake in responsAbility Investments AG. M&G has agreed to acquire approximately 90% of the issued share capital of responsAbility and expects to acquire the remaining 10% in due course. The acquisition is subject to regulatory approval.

This press release may contain projections and other forward-looking statements regarding future events or future financial performance. These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. Given business risks and uncertainties, undue reliance on these forward-looking statements should not be placed. Actual events or results may differ materially from those contained in the projections or forward-looking statements.

100X.VC Class 01 Portfolio Micro-Lending Platform Pocketly Gets Funding from Angel Investors and Micro VCs

The funding round was led by marquee angels Ashneer Grover, Jaimin Bhatt, Siddharth Somaiya, and Gaurang Shetty

Micro venture capital that invested includes Prophetic Ventures. Dholakiya Ventures, RIIDL, and Scale VC

India, 6th July 2021: Pocketly, a microlending platform for college students, has raised an undisclosed amount of funding. The marquee angels who led the funding round in personal capacity are Ashneer Grover (Founder, BharatPe), Jaimin Bhatt (CFO, Kotak Bank), Siddharth Somaiya (Founder, Organic Riot), and Gaurang Shetty (CEO, RIIDL). Other investors were micro VCs such as Prophetic Ventures, Dholakiya Ventures, RIIDL, and Scale VC.

The Bangalore-based moneylending platform was founded by Aarav Bhatia and Navdeesh Ahuja in 2019 with the vision to empower students and young adults by providing them with alternative credit and financial products. Pocketly aims to provide every college student with credit and multiple easy-to-use financial products.

Talking about the funding, Aarav Bhatia, co-founder of Pocketly, said, “We are pleased to have some of the best angels and VCs in the industry backing our vision. This funding will fuel our mission of providing credit to the deserving young market of India, which cannot access credit through existing traditional financial institutes. We are encouraged to relentlessly pursue our aim to enable the country’s youth with the benefits of easy credit. It is going to help so many students in fulfilling their dream by paying for the tuition fee or extracurricular activities."

Both the credit facility for students and microlending are unique and least-explored ideas in India. Most financial institutions demand a reasonable credit score for approving any amount of loan and that also ranges higher than what a student may need. However, it is not the same with Pocketly, rather it helps students build a strong credit profile before they step out in the real world.

Commenting on the announcement, Ashneer Grover, said, “Indian financial services market remains under-penetrated and there is huge space for products like Pocketly to cater to this large market. The microlending platform has built a unique product to serve the underserved market of young adults."

Adding further, Siddharth Somaiya, said, “Pocketly is a brilliant company as it brings young Indians into the credit system via microloans. They use their proprietary algo to keep their NPAs below 2.5%. This is extremely disruptive as it helps with the predictability of who will be creditworthy. This data could be extremely beneficial in the future when these customers will need bigger loans for two-wheelers, etc. As they amass customers, Pocketly’s data on young Indians’ credit will be a game-changer for the fintech industry in the country."

Mr. Ninad Karpe, Partner at 100X.VC, added, “It is common how young adults struggle to pay for their basic requirements due to financial constraints. Pocketly is offering a platform that is going to empower the youth by making them financially independent and responsible. Students can further leverage the added benefits offered by the microlending platform."

The microlending platform had raised a cheque from 100X.VC as part of the fund’s class 01 portfolio earlier in 2019.

About 100X.VC:

100X.VC is India’s first Fund to invest in early-stage start-ups using iSAFE - India SAFE Notes. The fund is sponsored by Mehta Ventures, the Family Office Investment arm of Sanjay Mehta, to nurture innovative ideas that add value and bring solutions to a problem. 100X.VC values its relationships with founders, co-investors, corporations, and investment bankers and effectively becomes the coach, strategy consultant, investment banker, business mentor, and trusted advisor of the start-up after investing.