Founded in 2015, Pune-based EarlySalary provides instant loans to salaried individuals of up to Rs 5 lakh directly, which is transferred to the borrower’s bank account. The average tenures for these loans range from three to 24 months. The startup also partners with companies to help employees receive a salary advance in their bank accounts for medical emergencies as well as for school fee financing. It has over 700 corporate tie-ups, at present.
EarlySalary also has a non-banking finance company (NBFC) license, through which it also co-lends to its customers along with partners.
The current funding also comes amid the Reserve Bank of India’s (RBI’s) latest digital lending guidelines which have put the focus back on regulated entities, giving fintechs with an active NBFC license an advantage.
With the upcoming lending guidelines, fintechs are expected to push the terms of capitalisation of their NBFCs, to participate in the risk-taking process of lending, as focus moves away from loan-distribution technology platforms.
The central bank on Wednesday
released the first leg of the much-awaited digital lending norms, which allow loan disbursals and repayments only among borrowers and entities regulated by the banking regulator.
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Further, any fee payable to a loan services provider is to be collected by the regulated entity directly from the borrower. This has made clear that RBI’s interest lies in licensed entities which it can govern.
“EarlySalary has been able to capitalise well on its NBFC… The current round will help raise more liquidity for them in the current market,” said a person who was aware of the functioning of the company.
When contacted, EarlySalary and Norwest did not respond to ETtech’s queries until press time. A spokesperson for TPG did not comment.
EarlySalary has raised around $35 million till date and is backed by the likes of Chiratae Ventures Ventures and Eight Road Ventures.
According to sources, EarlySalary currently is clocking Rs 1,300 crore in loan disbursements, on an annualised basis. Monthly loan disbursements for the startup stands at roughly Rs 350 crore. It has disbursed Rs 7,500 crore worth of loans since inception, according to sources.
