SBM Bank India has tied up with fintech player Lendingkart for providing working capital to micro, small and medium enterprises (MSMEs) through an overdraft facility, according to a statement.
With this collaboration, SBM Bank will offer a customised overdraft facility to over one lakh customers of Lendingkart, largely MSMEs, according to the statement released on Friday.
Traditionally, financial companies extend term loans with fixed tenors to customers with overdraft products remaining an exclusive domain for banks.
With this collaboration, the Indian MSMEs being catered to by Lendingkart can avail the unique overdraft facility powered by SBM Bank India on the Lendingkart platform, said the statement.
It will be a flexible credit line for the customers sourced through digital channels, offering on-demand disbursement with zero physical paperwork and ready account statements.
"We continue to grow inorganically through collaborative banking strategy.
"In the current ecosystem for this customer segment across the nation, overdraft facilities offered by most lenders require borrowers to furnish collaterals such as property, fixed deposit and business inventories, which most small businesses are not able to provide.
"Our collaboration is aimed at solving such challenges through technology, efficiency and customised solutions," Sidharth Rath, managing director and chief executive officer of SBM Bank India, said.
Lendingkart has provided credit facilities of over Rs 7,000 crore to MSMEs since its inception in 2014.
"We look forward to collaborating for more opportunities on newer credit facilities being offered and utilising Lendingkart's platform and on-ground strengths to achieve the common goal," Harshvardhan Lunia, founder and managing director of Lendingkart, said.
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