Start-up in B2B e-commerce Udaan’s digital lending arm, UdaanCapital, has teamed up with Northern Arc Capital Limited to make financing available to over 50,000 kiranas and small businesses.

UdaanCapital is a subsidiary of Udaan that is owned and run in collaboration with IDFC First Bank. UdaanCapital currently facilitates the disbursement of over Rs 8,0000 crore of credit per annum to over 150,000 kiranas/small enterprises across the country, according to the start-up. The credit amounts available vary from Rs 10,000 to Rs 25 lakh, with short-term lending terms.

With credit lines supplied by its lender partners, UdaanCapital enables small and medium-sized retailers to make purchases for their stores from a wide range of suppliers on the udaan platform. According to a corporate statement, UdaanCapital now powers more than a third of sales on udaan, India’s largest B2B commerce platform.

Udaan’s logistics and sales network are also used in the lending platform, which has created strong loan re-collection capabilities required to efficiently service this area.

Furthermore, based on transactional data, UdaanCapital has built unique underwriting and risk management technologies, allowing credit access.

“Our mission has been to empower and drive Kirana eCommerce by providing formal credit to the small retailers of our country. We have always believed that the right solution to closing the working capital gap in small retailers lies in taking a trade-centric view of risk management — and just as importantly helping our lender partners take a similar view. In Northern Arc we found a like-minded partner, who shared our vision and came on board at a very early stage,” said Chaitanya Adapa, head, UdaanCapital in a statement.

Northern Arc is a comprehensive financial services platform that provides credit to SMEs, individuals, financial institutions, and developing businesses. It claims to have disbursed over 5 million loans in the last year, including company loans, personal loans, and BNPL facilities, all through a fully digital process.

“At Northern Arc, we aim to be pioneers in finding innovative solutions to enable finance for MSMEs and the next billion households. We do this directly and through exciting partners like Udaan. Nimbus, our digital platform helps us integrate seamlessly with partners, ensuring instantaneous disbursements and a best-in-class experience for borrowers. We are delighted to have joined forces with UdaanCapital since their early days and meeting the credit needs of over 50,000 Kirana stores across the country,” added Ashish Mehrotra, MD & CEO, Northern Arc Capital.