The company, which so far relied on partner-led lending and loan service provider (LSP) arrangements, has begun disbursals from its own balance sheet. The move is expected to give Credflow greater control over credit products, underwriting, and collections as it looks to expand its working capital financing business.
The firm is targeting an asset book of around Rs 100 crore within this fiscal year, according to founder and chief executive officer Kunal Aggarwal.
“The idea was that once we get our own licence, we will be able to build our own book, and partner with other lenders in a co-lending model. This gives us much more flexibility and ability to structure our products, and tailor them based on SME needs,” Aggarwal told ET.
Backed by the likes of Omidyar Network India and Stellaris Venture Partners, Credflow started as a software-as-a-service platform that helped small and medium enterprises (SMEs) manage their finances by providing an overview of cash flows, improving outstanding receivables, and embedding contextual financial services to reduce their working capital cycles.
Credflow said in a statement that it has built a large database using GST-verified invoices, and banking and enterprise resource planning (ERP) integrations, which gives it visibility into invoices worth over $800 billion across more than six million SMEs. The company said this helps it assess creditworthiness with greater accuracy, especially for manufacturers, traders, and distributors that traditionally face delays in accessing capital.
With the new licence, Credflow plans to introduce additional products such as purchase invoice discounting, unsecured and partially-secured term loans, manufacturing expansion financing, and structured SME credit. It also plans to pursue co-lending partnerships with banks and other NBFCs.
In 2023, CredFlow acquired the Y Combinator-backed management startup TechBiz in an all-cash deal. In 2024, it secured $3.7 million from its existing investors, including Inflexor Ventures.
The MSME-focused lending space has been under pressure due to stress in the unsecured loan market, which led to companies like Lendingkart facing a steep valuation cut and a cash crunch.
Last month, ET reported that Lendingkart’s troubles are set to deepen as a legal dispute has erupted between cofounder Harshvardhan Lunia, Lendingkart Technologies, and Fullerton Financial Holdings, its majority shareholder.