EaseMyTrip’s Prashant Pitti to launch co-lending platform Optimo for loans to rural MSMEs
Credit and finance for MSMEs: This will be the third startup by Prashant Pitti after he co-founded EaseMyTrip in 2008 and dating app Profoundly in 2017.
Credit and finance for MSMEs: Prashant Pitti, co-founder of travel company EaseMyTrip, is working on his third startup — a co-lending platform to provide collateral-free loans to MSMEs in rural India. The announcement was tweeted on Monday by Pitti who also founded the dating app Profoundly in 2017.
“Have been thinking to start something impactful at the grassroots level (and run it alongside EaseMyTrip). Finally, starting a co-lending platform (and NBFC), to serve the highly underserved MSME market, by offering collateral-free business loans in rural India. Looking to hire 100+ folks for various roles (based out of Bangalore) in risk, credit, finance, hr, ops, sales, digital, tech, etc.” he tweeted.
“The new venture is named Optimo and it is a matter of around a month for it to launch. The idea is to make an impact on a larger level in the underserved MSME space,” a person aware of the new venture told FE Aspire on anonymity.
Pitti, however, declined to comment on the new venture.
Easy access to affordable credit remains the biggest barrier for MSMEs to grow even as bank credit deployed to MSMEs has continued to increase year-on-year. The total amount of bank credit extended to MSMEs in FY22 had increased by 24.6 per cent from FY20 and 12.7 per cent from FY21, according to official data.
In May this year, Rs 20.20 lakh crore bank credit under priority sector lending — 14.5 per cent of India’s total non-food bank credit worth Rs 138.5 lakh crore was deployed in the MSME sector, as per the data from the Reserve Bank of India.
However, according to a June 2019 report by the UK Sinha Committee constituted by the RBI, an estimated Rs 20-25 lakh crore credit gap existed in the MSME sector while a recent paper by investment banking company Avendus Capital had estimated an astounding credit gap of $530 billion in the MSME sector.
Co-lending as a model has gained momentum in the country as it allows banks to diversify their portfolios, and non-banking financial companies (NBFCs) to access cheaper funding sources leading to lower risk exposure and eventually reduced cost of funds. Yubi, U GRO Capital, Avanti Finance, etc., are among the co-lending players in India.
Importantly, banks and NBFCs could sign co-lending deals worth Rs 1 trillion in the current financial year, after public sector banks alone declared a co-lending portfolio of Rs 25,414 crore for FY23, FE had reported in April this year.
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