Mumbai-based financial services company CredAble’s wholly-owned subsidiary, Equentia Financial Service Private Limited, has been granted a non banking finance company (NBFC) licence by the Reserve Bank of India (RBI).
The NBFC license will allow the company to lend directly to small and medium enterprises (SMEs) and micro, small and medium enterprises (MSMEs), and access debt markets to optimise its capital structure, an official statement said.
It will also help SMEs and MSMEs by providing suppliers with increased access to on-tap funding and untapped lending opportunities such as pre-invoice stage financing within India’s corporate supply chains, the statement added.
“CredAble will use its NBFC status to provide short-term working capital solutions to suppliers in select eco-systems which tend to experience mismatched receivables and payables cycles,” said Nirav Choksi, co-founder and CEO of CredAble.
Choksi added that NBFCs are playing an important role in the economy, and friendlier regulations will serve to boost liquidity available to supply chains and strengthen the credibility of fintech companies.
CredAble is also working on blockchain and big data to improve its value proposition for its platform participants, the statement said.
CredAble has developed a proprietary credit assessment model, which analyses financial, transactional and company-specific parameters to generate credit scores for prospective borrowers and minimises the risk of default.
In June 2018, CredAble had raised Rs 100 crore ($14.8 million then) in a Series A funding from Alpha Capital.