Meet the lender taking secured small-business credit beyond India’s top 100 locations

Pankaj Poddar, a seasoned credit and risk executive, has founded Business Nextgen Finance Private Limited (BNF) with a mission to expand secured small-business credit beyond India's top 100 locations. The young NBFC has recently secured Rs 215 crore in equity funding from several institutional and strategic investors, including Beams Fintech Fund I, Baring Private Equity India Fund 6, Saison Capital, and UNLEASH 1st Investment Partnership.

This capital injection will enable BNF to grow its secured lending business, expand its geographic reach, and invest further in technology.

Poddar's ambition is to build a pan-India presence across 1,000 locations, focusing on smaller cities and towns where entrepreneurs may have viable businesses but may not fit conventional underwriting frameworks. Many of these small businesses may lack traditional documentary evidence of income, and collateral assessment can be challenging outside of major cities.

BNF's loan amounts typically range from Rs 5 lakh to Rs 30 lakh, with an average interest rate of around 17-18%. Their underwriting process focuses on the borrower's cash-generating ability rather than just the value of the collateral.

The fundraise will allow BNF to test their theory that a significant credit gap remains in India's underserved MSME segment. Poddar emphasizes the importance of understanding the entrepreneur's background and the sustainability of their cash flow over the loan's duration. While technology will play a role in streamlining processes and reducing operating costs, the core of BNF's approach remains a traditional, touch-and-feel underwriting model.