financial decisions, financial

Capital Float, the digital lender backed by Amazon, Sequoia India among others, has announced a new partnership with one of Japan’s biggest financial institutions, Credit Saison. Under the said partnership, the digital lender will offer working capital financing to Micro, Small & Medium Enterprises (MSMEs) across India.

According to a detailed release sent to The Tech Portal, both the companies have jointly developed a “unique co-origination model” through which they will both contribute capital to deliver last-mile credit to MSMEs across the country. MSMEs will be able to apply for these loans online and receive approvals through Capital Float’s technology backbone, coupled with the credit underwriting platform integrated with Credit Saison’s systems.

Co-origination model in lending has been around for quite some time now. Capital Float, was among one of the early drivers of this mode of lending, which sees two lenders collaboratively providing loans to prospective businesses. The model was most recently also encouraged by India’s Finance minister as well, since it helps lenders reduce risks that come along with such MSME loans.

This partnership will be the first instance of a global lender teaming up with an Indian player to address this gap. Capital Float today manages the largest co-origination ecosystem in India.

Talking about the partnership, Kosuke Mori, Managing Director for Credit Saison Asia Pacific, said that the company is looking to loan as much as $1 billion worth of credit to India’s MSMEs. “Our alliance with Capital Float – Credit Saison’s first SME-focused partnership in India – will be a formidable enabler for both entities to deploy a large portion of this capital towards the sector. We have also integrated closely at a technology stack and API level, enabling a seamless experience for the end-borrower.”, added Mori.

Capital Float claims to have lent over ₹8,500 Crore (~$1.2 billion) in digital credit across India, with plans to further lend ₹1,500 Crore to MSMEs in the next year, supported by this partnership.

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