Namaste Credit, a digital marketplace and technology platform for SME loans, has raised $3.8 million in a Series A investment round from Nexus Venture Partners.

The company intends to use the corpus raised to grow its geographic footprint, enhance its technology and data analytics platform, and further scale its business.  The company also plans to significantly increase its channel partner program across India and further expand its technology licensing partnerships with lenders globally.

Namaste Credit was co-founded in 2014 by Lucas Bianchi, Gaurav Anand and Krishnan Parameswaran.

“Our technology provides lenders better quality underwriting and reduced turnaround times at significantly lower costs than existing manual underwriting processes. Our clients are witnessing much higher productivity as a result of being able to accurately process physical documents digitally and run automated credit algorithms,” said Lucas Bianchi, chief executive of Namaste Credit, in a statement.

SME credit is an over $500 billion market in India but remains largely traditional and offline. Recently there has been a strong focus by the government on this sector and by private lenders to expand their SME loan books significantly.  However, concerns over underwriting and asset quality of SME loans remain.

Namaste Credit claims that its technology platform enables lenders to identify potential underwriting issues much faster and also “prevent intentional fraud.”  “We provide predictive analytics on banking and financial data of SMEs very efficiently, which helps lenders more accurately assess and price risk,” said the company’s co-founder Gaurav Anand.

Over the last 12 months, disbursement volumes on Namaste Credit’s platform have increased over 10 times with participation of over 30 institutional lenders. Using machine learning and patent pending algorithms, the company has increased its loan conversion rates to over 70%, amongst the best in the industry. Namaste Credit is also starting to license core technology to several leading NBFCs and banks.

“SME credit is seriously constrained due to lack of reach and relevant data to assess credit worthiness of borrowers. Namaste Credit’s technology, combined with its channel partners and lender network, is already making a significant impact on facilitating credit to SMEs in a win-win manner for all,” said Anup Gupta, Managing Director, Nexus Venture Partners.

Sunstone Capital acted as the exclusive financial adviser for this transaction.

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