FincFriends Private Limited, a non-banking finance company, has raised INR 98.5 crore through debt funding. The company will use the funds to grow its business and launch new loan products for underserved borrowers in India.
The funding round includes INR 54.5 crore from other non-banking finance companies (NBFCs) and INR 44 crore through non-convertible debentures (NCDs). Investors in this round include IBL Finance, Incred Financial Services, Real Touch Finance, Shine Star Build-Cap, and Western Capital Advisors.
“This funding marks a strategic milestone in our journey to enable accessibility of responsible credit across India,” said Artem Andreev, CEO of FincFriends. “With the valuable trust of our investors, we are positioning our brand to deepen our reach, strengthen fintech infrastructure and develop personalised credit solutions to address the financial realities of underserved communities.”
FincFriends last raised $7.8 million in April last year. This included $2 million in equity, $2.8 million as loans from outside sources, and $3 million in debt from InCred Finance and Grow Money Capital.
RupeeRedee, based in Gurugram and started in 2018, offers quick short-term personal loans online through its lending partner, FincFriends.
The funding comes at a time when fintech lenders, especially those offering personal loans, are facing the biggest slowdown in unsecured lending since the pandemic.
The slowdown has made many fintech companies more careful in how they operate. For example, LoanTap, an NBFC that used to focus mainly on personal loans for salaried people, has now completely stopped offering personal loans.
“The personal loan segment was always a good product, but with RBI’s tightening and limited borrowing limits, we had to scale down,” said Bidul Agwaan, senior VP at LoanTap, in an interview. “Until we see positive capital supply, we won’t take book exposure in personal loans. We expect recovery only by Q2 or Q3.”
This change in strategy shows the bigger problems the industry is facing. Borrowing money has become much more expensive for smaller NBFCs. LoanTap, for example, said its cost of funds has gone up by nearly 200 basis points (or 2%) over the last two years.
Because of this, consumer-focused platforms like MobiKwik have stopped giving out short-term unsecured loans like Buy Now, Pay Later (BNPL). Meanwhile, Paytm and PB Fintech (which runs Paisabazaar) have shifted their focus to safer, secured loan products.
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