Fintech firm udaanCapital says it enabled Rs 2,200 cr credit to retailers

Company says 'working capital availability in the country is huge as small businesses adopt digital payments

The financial technology arm of Udaan, the B2B e-commerce firm, said on Wednesday it has enabled credit worth more than Rs 2,200 crore to some 100,000 retailers in FY22.

The retailers sell electronics, lifestyle, general merchandise and other goods, said udaanCapital. The company, through its lender partners, enables small and medium-sized shops to make purchases from suppliers by providing credit.

“The market gap in working capital availability for trade is still very huge. This milestone gives us a lot of conviction that we are on the right path in helping reduce this gap,” said Chaitanya Adapa, head--udaanCapital.

The company said its algorithms leverage datasets such as transaction patterns and trade invoices to select borrowers, help lender-partners’ underwriting decisions and improve approval rates for borrowers by 35 per cent. As a result, 97 per cent of the disbursed amount is collected before the due date from discretionary category retailers.

Collections are through a multi-channel process spanning digital nudges, tele-calling and field visits. The operation runs on a technology that manages a scale of nearly one million collection entries per month coming in from various channels. As a result, the company said this helps recover 99.5 per cent of lender partner disbursals within 180 days from nearly 750 towns and 9000 pin codes.

Another key element that enabled collections is the promotion of digital collections among small retailers. As many as 88 per cent of retailers that use udaanCapital’s services have adopted digital payments. This number was 55 per cent in 2020.