Capital is the fuel to accelerate a business. But for India’s 63 Mn micro, small and medium enterprises, which accounted for 45.73% of total exports in FY24, securing collateral-free business loans remains a major hurdle, slowing their growth and competitiveness. Fortunately, India’s ongoing fintech revolution and new-age startups have risen to the occasion to plug this credit gap. Among them is Lendingkart, a digital-only MSME lending platform set up by Harshvardhan Lunia, a banker-turned-entrepreneur.

Born into a self-made business family based in Ahmedabad, Lunia is an alumnus of the Indian School of Business and ICAI (Institute of Chartered Accountants of India). He spent a decade in corporate banking, holding senior positions at ICICI Bank and Standard Chartered. However, he left his banking career in 2011 to cater to cash-strapped MSMEs.

Launched in 2014 to make business finance easily accessible to MSMEs, Lendingkart has already raised $180 Mn. Last year, Fullerton Financial Holdings (FFH), a wholly owned subsidiary of Singapore-based Temasek, acquired a controlling stake in the company for $87 Mn.

Although the company was on a strong growth trajectory a couple of years ago and posted a profit of INR 119 Cr in FY23, it saw a 97% dip in profitability to reach INR 3.25 Cr in FY24.

According to Lunia, the decline was caused by rising staffing costs, increased credit expenses and fees associated with portfolio renewals and new registrations under credit-guaranteed schemes.

Despite the setback, its assets under management (AUM) stood at INR 7,127 Cr as of March 2024, signalling the company’s continued focus on long-term growth.

Lendingkart has bolstered its support system to enable AUM growth and foster its outstanding portfolio. For instance, it has improved internal audits, compliance and regulatory functions to align with enhanced regulatory requirements.

Additionally, it has strengthened customer service and collection departments to enhance customer satisfaction and operational efficiency. The platform is also building a talent pool for new initiatives like personal loans and credit cards.

In sum, the company is fine-tuning its growth strategy while navigating a challenging financial landscape ahead of a planned IPO in May 2025.

However, Lunia has never viewed the business as a matter of mere numbers. It is about building trust and helping MSME owners achieve their goals. Unlike people who try to make a quick impact, the Lendingkart founder says patience and resilience are key to long-term success.

His leadership approach is rooted in trust and empowerment, as he gives young talent responsibilities for exceptional outcomes.

“Pace yourself; success takes time. Meanwhile, enjoy the journey,” Lunia advises aspiring entrepreneurs.

In this exclusive interaction with Inc42, part of our Griffin Dialogues series, Lunia provides insights into his journey, business philosophy and leadership style, which helped build the narrative of Lendingkart, one of India’s leading fintech enterprises. Here are the edited excerpts.

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