CredAble records doubling of loan disbursements by 2023
CredAble, a fintech offering working capital financing to MSMEs, recorded a two-fold increase in loan disbursements worth Rs 45,000 crore in calendar year 2023 (CY23), driven by increased partnerships with banks, corporates and new customer acquisition.
The fintech company facilitated disbursements of over Rs 22,500 crore in the calendar year 2022 (CY22).
“This year we have worked with more banks and companies. Vendors, dealers and distributors in their ecosystem were funded through this ecosystem. We have also acquired small and medium enterprises (SMEs) directly onto our balance sheet from our own non-banking financial company (NBFC),” said Nirav Choksi, co-founder and CEO of CredAble, in an interaction with Business standard.
Choksi explained that SMEs previously relied on long-term loans because they could not find short-term financing for their businesses.
“Most banks and NBFCs would not do short-term working capital financing as they focused on long-term corporate loans. As a result, many SMEs were forced to take these loans when they needed short-term loans because companies that are growing need working capital for a short period of time,” he added.
Meanwhile, Choksi added that the company could consider raising money through a Series C round in mid-2024.
“The only visibility we will need from a capital perspective is when we want to make inorganic acquisitions in the future. We aim to hold a round sometime in June this year. It could range between $50 and 75 million,” he added.
In the trade finance space, the company facilitated transactions worth Rs 5,000 crore in 2023. CredAble said its non-banking financial company (NBFC) processed invoices worth Rs 900 crore, while it recorded Rs 2,000 crore in disbursement value in the last year.
The company, which has a customer base of 2.5 million small and medium-sized enterprises (SMEs), says it gets almost 40 percent of its revenue from its banking-as-a-service tech license. It provides technology to platforms such as fintechs and banks, allowing them to disburse working capital loans to customers.
“We charge technical licensing fees for all platforms, such as large companies or banks. Another form of income we generate is borrowing from our own balance sheet. Forty percent of our revenue comes from technology licensing, while 60 percent comes from loans,” Choksi added.
The company added that they hope to grow 100 percent in the coming year.
“Our goal for the next calendar year is ambitious but achievable: a 100 percent increase in SME transactions, while maintaining cost-effectiveness. As we deepen our domestic relationships, we expect to see substantial growth in our annual payouts, supporting India’s thriving MSME segment,” said Ram Kewalramani, co-founder and MD, CredAble.
Founded in 2017, the Mumbai-based fintech has partnered with over 35 financial institutions, with a presence in seven countries.
First print: January 14, 2024 | 6:30 PM IST