Credit Saison, Capital Float to provide digital financing to Indian SMEs

Credit Saison, one of Japan’s largest financial institutions, has partnered with Capital Float, a fintech NBFC  (non-banking finance company), to deliver working capital financing to micro, small and medium enterprises (MSMEs) across India. The two companies have jointly developed a unique co-origination model through which they will both contribute capital to deliver last-mile credit to MSMEs across the country. The companies said the MSMEs will be able to apply for these loans online and receive approvals within the quickest turnaround time in the industry, powered by Capital Float’s technology and credit underwriting platform integrated with Credit Saison’s systems.

“Credit Saison plans to invest significantly in India and build a loan book of $1 billion in India over the next few years, a significant part of which will flow into the MSME sector,” said Kosuke Mori, managing director, Credit Saison Asia Pacific. “Our alliance with Capital Float – Credit Saison’s first SME-focused partnership in India – will be a formidable enabler for both entities to deploy a large portion of this capital towards the sector. We have also integrated closely at a technology stack and API (application programming interface) level, enabling a seamless experience for the end-borrower.”

Bengaluru-based Capital Float leverages technology and big data analytics to deliver innovative credit products to businesses and individuals across the country. What is unique about the new partnership is that it will operate through a co-origination model. Co-lending of SME loans was pioneered by Capital Float, and is considered to be game-changer for scaling up MSME lending. This partnership will be the first instance of a global lender teaming up with an Indian player to address this gap. Capital Float said it manages the largest co-origination ecosystem in India.

Sashank Rishyasringa, co-Founder, Capital Float said the company has already lent Rs 8,500 crore in digital credit across India and it plans to further lend Rs 1,500 crore to MSMEs in the next year, supported by this partnership. 

“Together with Credit Saison, we continue to double-down on MSME segments where credit demand is severely underserved, with a particular focus on Tier 2 and 3 cities,” said Rishyasringa. “Our focus will be on providing credit to small manufacturing and services firms, followed by small retailers using digital payment modes.”

The partnership between Credit Saison and Capital Float has gone live this month, with plans to scale up rapidly over the coming quarters.