Prashant Pitti, a co-founder of EaseMyTrip, intends to build an NBFC and co-lending platform to cater to the neglected MSME sector.
Pitti stated the startup would provide business loans without collateral in a tweet. “Have been thinking to start something impactful at grassroot 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 loan in rural India,” Pitti tweeted on Tuesday, July 18.
Before going public on the stock exchanges in 2021, EaseMyTrip was a bootstrapped company. Before transitioning to become a B2C company, it began as a B2B SaaS service provider for offline travel agents. Due to an enormous rise in hotel and flight bookings, the traveltech startup's net profit increased 33.1% year over year (YoY) to ₹ 31.1 Crore in the fourth quarter of fiscal year 2022–23 (Q4 FY23).
The paucity of funding choices for these businesses appears to be the driving force for Pitti's lending in the MSME loan market. The Reserve Bank of India (RBI) reports that the demand for credit in the MSME sector is $490 billion while the total availability from formal sources is $192 billion, demonstrating how this sector is still underserved. One of the primary contributors of this demand-supply imbalance is the absence of financing choices due to limited working capital, a poor bureau score, and a lack of documents.
The availability of credit continues to be a major problem for SMEs even though the total amount of outstanding micro and small loans increased by 21.5% to ₹ 4,95,281 Crore in March 2022 from ₹ 4,07,675 Crore in March 2021. Pitti's company will compete with companies like LedingKart and Indifi, among others, in the MSME lending space.
Anshuman Kumar, a co-founder and CTO of Teachmint, left the educational technology company earlier this year to concentrate on his new business, Duolop. Pitti intends to grow his business while simultaneously working at EaseMyTrip, despite the fact that cofounders have frequently quit to launch new ventures.