Investors warm up to lending start-ups

Start-ups charge interest rates of 18-24% while banks set 15-18%

Bharat Rathore runs a small trading business at Taranagar in Churu district, Rajasthan. Each time he needs a loan, he has to go to a private bank in Jaipur. The bank sends a representative to assess his business and takes three to four weeks for the loan to be approved and disbursed. 

Last year, Rathore began using app-based lending start-ups such as Lendingkart and Capital Float, which are able to process and disburse a loan in three-four days, precluding the need to go to Jaipur. They use an app to evaluate the application, and approve and disburse the loan online.