“It (Trillion Loans) will explore partnerships with other fintech firms and other companies to enable credit across a diverse set of businesses and consumers. BharatPe has also infused a substantial amount of investment into Trillion Loans to enable the NBFC to grow its loan book,” the company said in a statement.
Commenting on the acquisition, BharatPe founder and chief operating officer Shashvat Nakrani said: “Today, we facilitate loans of over Rs 500 crore every month to our merchant partners. Providing access to credit to our merchant partners is key to our business model, and this acquisition will further propel our growth and accelerate our journey to profitability.”
“Acquiring a controlling stake in Trillion Loans is aligned to the BharatPe Group’s larger purpose and will enable us to facilitate access to capital to a wider set of underserved and unbanked businesses as well as customers,” he added.
What Trillion Loans brings to the table
Trillion Loans offers secured and unsecured loans to small and medium enterprises (SMEs), including small business loans as well as working capital loans.
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Additionally, the company also offers consumer products such as auto, gold, and education loans.
Previously, BharatPe’s application for an NBFC licence was rejected in 2019. In October 2021, the Reserve Bank of India (RBI) issued a small finance bank (SFB) licence to a joint venture by Centrum Financial Services Ltd and Resilient Innovations Pvt Ltd (BharatPe). The new SFB was called Unity Small Finance Bank.
With the lack of an NBFC play, BharatPe was then planning to open bank accounts for its merchant partners and to cross-sell financial services, including lending. The controlling stake in Trillion Loans will allow the company another direct avenue to cross-sell financial services to merchants.
To function independently
In a statement, the company said that Trillion Loans will operate as an independent entity with its own team under the supervision of its board of directors – to which BharatPe has appointed three members. The company has appointed retired State Bank of India executive Ravindra Pandey, BharatPe’s chief financial officer and interim chief executive officer Nalin Negi, and banking vertical head Sabyasachi Senapati to Trillion Loans’ board.
Negi was appointed as interim CEO of BharatPe in January when then chief executive Suhail Sameer transitioned to an advisory role.
Eyeing NBFC sway
BharatPe’s acquisition of Trillion Loans comes in the backdrop of fintechs focussing on lending through their own NBFC units while reducing their dependency on partnerships given the heightened regulatory scrutiny following the issuance of digital lending guidelines by the Reserve Bank of India (RBI) last year.
ET reported on Monday that the Kunal Shah-backed Cred is bolstering its credit play as it looks to raise separate capital for its NBFC Newtap Technologies. Incorporated by Shah in 2021, Newtap Technologies has discussed raising $50-70 million to help scale its participation and credit exposure to Cred’s user base.
In November 2021, ET had first reported that Shah, through Newtap Technologies, had acquired Parfait Finance & Investment, an RBI-registered NBFC.
Last week, ET had reported exclusively that neobanking startup Jupiter was granted an NBFC licence by the RBI. Jitendra Gupta, founder of Bengaluru-based Amica Financial Technologies Ltd, which runs Jupiter, had told ET that the Sequoia- and Tiger Global-backed startup intends to capitalise its lending business with around Rs 100 crore, and raise an additional Rs 100 crore in debt to fund its credit operations.
Jupiter aims to hit annual disbursements of Rs 600-700 crore in short- and medium-term personal loans.
The lender had started out with Bullet, a credit product built on UPI’s rails, but discontinued the product in 2021. Later, the company relaunched its lending activities by partnering with Trillion Loans, which operates the peer-to-peer — P2P — lending platform Liquiloans.