Lendingkart banking on a hybrid lending model for future growth

Lendingkart, one of the leading financial technology startup, is banking on a hybrid lending model to power its future business growth. The hybrid model assumes the startups disbursing loans both on their own as well as through financial partners such as banks. The startup, which has been lending through its own books as a nonbanking financial company, is set to start co-lending with banks and other financial firms through a marketplace platform. TC Meenakshisundaram, managing director of IDG Ventures India, said that “While lending companies should initially focus on building credibility in one aspect and prove that the model works, they should eventually move up in the value chain through a hybrid structure. While a marketplace offers a risk-sharing and reward-sharing model, lending through your own books shows that the company has skin in the game”.

The model has been tested by others in the same industry. Capital Float, for example, which started its marketplace model last year and currently co-lends with five financial institutions, is set to scale up loans disbursed through its partners to 50% of its total disbursals by the end of this fiscal year. Currently, that is at 40%. While others such as BankBazaar are against this practice and shying away from leveraging it.