Fullerton Financial Holdings (FFH), a subsidiary of Singapore’s Temasek, has acquired a majority stake in the Indian fintech platform Lendingkart for ₹252 crore. This strategic investment aims to bolster Lendingkart’s position in the micro, small, and medium enterprises (MSME) lending sector, which is crucial for India’s economic growth.
Strengthening MSME Lending
Founded in 2014 by Harshvardhan Lunia and Mukul Sachan, Lendingkart specializes in providing digital loans to MSMEs, which often face challenges accessing traditional banking services. With this new capital infusion, Lendingkart plans to enhance its technology-driven credit underwriting processes and improve access to lower-cost funds for small businesses.
Harshvardhan Lunia expressed optimism about the partnership, stating, “With Fullerton’s strategic support, we will strengthen our underwriting capabilities and significantly increase loan disbursals to help small businesses thrive.” The acquisition is expected to help Lendingkart expand its operations across India’s underserved markets.
A Vote of Confidence
This acquisition comes at a pivotal time for Lendingkart. Recent reports indicated that the company was facing financial challenges and was in talks for a significant valuation cut due to difficulties in securing new equity financing. However, FFH’s investment is seen as a strong vote of confidence in Lendingkart’s vision to empower MSMEs with easier access to credit.
Hong Ping Yeo, CEO of FFH, highlighted the importance of this investment: “Our investments in Lendingkart are a testament to our continued belief in the MSME opportunity in India.” He emphasized that well-governed and scalable franchises can significantly benefit small businesses.
Expanding Financial Inclusion
The Indian MSME sector has a financing gap estimated at nearly $530 billion, presenting a vast opportunity for digital lending platforms like Lendingkart. By leveraging technology such as AI and machine learning, Lendingkart aims to serve underbanked entrepreneurs effectively. The platform has already disbursed over ₹20,000 crore in loans to more than 3 lakh businesses across India.
With this acquisition, FFH will increase its stake from approximately 38% to a controlling interest, further solidifying its role as a key player in the Indian fintech landscape. This partnership not only enhances Lendingkart’s financial stability but also aligns with the broader goal of fostering financial inclusion for small businesses in India.