After raising $22 million (Rs 144 crore) from e-commerce giant Amazon & existing investors a week ago,  online lending platform Capital Float has raised debt funding of 6 million euros (₹48 crores) from the Netherlands- based asset management company, Triodos Investment Management (Triodos IM), a wholly-owned subsidiary of Triodos Bank.

Capital Float said that it will use the funds from the debt raise for the purpose of onward lending, as the company continues adding to its existing AUM of over ₹1200 crores. It is common for lending companies to raise debt funding to replenish their loan book. This takes Capital Float’s total debt raise to $130 million (₹840 crores). The company has previously raised debt from banks and NBFCs in India, such as Kotak Mahindra Bank, Axis Bank, Reliance Capital and Northern Arc Capital (formerly IFMR Capital).

The digital lending company offers working capital loans from Rs 3 lakh to Rs 1 crore to small businesses, through its technology-led loan origination and credit underwriting platform. It works with e-commerce merchants, early-stage B2B service providers and small manufacturers to provide three kinds of loans; loans against invoice, loans against purchase order and unsecured business loan.

RBI’s guidelines on P2P lending

Capital Float is operated by Zen Lefin Pvt Ltd, which is an NBFC firm, and hence it is regulated by Reserve Bank of India (RBI) in India. RBI had come out with final guidelines in October 2017 for peer-to-peer (P2P) lending platforms, according to which P2P lending companies will be regulated as non-banking finance companies (NBFCs) and will come under the purview of the RBI. According to the guidelines, the P2P platforms will act as only as an online intermediary and not raise deposits. These platforms will only act as a facilitator between different parties, and cannot provide any credit enhancement or credit guarantee. The RBI also directs that these companies cannot cross-sell other any product except for loan specific insurance products, and are not permitted international flow of funds. Also, the P2P lending platforms are supposed to undertake due diligence on the participants including credit assessment and risk profiling of the borrowers and disclose the same to their prospective lenders. They will also have to take prior and explicit consent of participants to access their credit information. The guidelines add that, the platforms will have to provide assistance in disbursement and repayments of loan amount and render services for recovery of loans originated on the platform.