NBFC Techfino Bags Fresh Capital to Expand MSME Lending in Tier 2 & 3 India
Bengaluru-based Techfino, a non-banking financial company (NBFC), has raised Rs 65 crore in equity funding in a round led by Stellaris Venture Partners and Saison Capital, the venture arm of Tokyo-listed Credit Saison.
Founded in 2019, the fintech-focused lender will use the new capital to expand its branch-led secured lending model, particularly targeting micro and small enterprises (MSEs) in semi-urban and rural markets.
From 30 to 60 Branches: Techfino’s Expansion Blueprint
With the fresh infusion of funds, Techfino plans to:
- Double its physical presence from 30 to 60 branches over the next 12 months
- Hire 200+ new employees to support growing loan volumes
- Enhance its proprietary tech stack, especially in credit underwriting tailored to India’s informal economy
The NBFC is already profitable and maintains a tight grip on asset quality, according to co-founder Rajesh Panda, a former executive at Standard Chartered.
“This fundraise is 100% equity and aimed at scaling our secured MSME lending, especially loans against property,” said Panda.
Who Is Techfino?
Founded by three ex-banking professionals — Rajesh Panda, Jayaprakash Patra (ex-ICICI, ING), and Ratikant Satapathy (ex-Bajaj Finance) — Techfino operates two key verticals:
- Unsecured education loans in partnership with over 100 colleges and universities
- Secured MSME loans, especially loan against property (LAP) offerings in Tier 2 and Tier 3 towns
The company has built a niche serving the credit needs of India’s informal and semi-formal businesses, such as grocery store owners, dairy farmers, and traders.
Rs 225 Crore AUM and Counting
As of FY25, Techfino has built an asset under management (AUM) of Rs 225 crore, of which nearly Rs 100 crore sits in its LAP book. The firm currently disburses over Rs 10 crore per month in secured loans and expects that number to double in the coming quarters.
The average LAP ticket size ranges between Rs 8 lakh and Rs 12 lakh, typically extended to borrowers in Karnataka, Gujarat, Madhya Pradesh, and Andhra Pradesh.
Tech-Driven Rural Lending: A Differentiated Model
Unlike traditional NBFCs that focus on salaried income or single business owners, Techfino assesses household-level income. It considers multiple family members’ earnings — an essential approach in rural India, where income streams are often fragmented.
“A borrower may run a shop while their spouse works in a factory. We look at the total household income. That’s where our risk model excels,” said Satapathy.
The company’s underwriting engine integrates:
- APIs for banking data, credit bureau, and property verification
- Legal compliance checks embedded in the system
- Proprietary credit scorecards designed for rural lending
This allows Techfino to underwrite semi-urban and rural borrowers as efficiently as urban fintechs, making the lending process faster and smarter.
Backed by Institutions and Already Profitable
Techfino has disbursed over one lakh loans across its two verticals and counts DCB Bank among its previous institutional backers.
- FY25 Revenue: Rs 34 crore
- Profit Before Tax: Rs 1.5 crore
- Current Team Size: 400 employees
- Projected by Year-End: 600 employees
The company’s education loan business remains profitable, thanks to its deep partnerships with universities like Manipal and Amity, but its clear focus now is on the rapidly growing secured MSME lending segment.
“We see humongous growth ahead in MSME LAP. That’s where we’re doubling down,” said Panda.
Why This Matters
In a country where over 90% of businesses are in the micro and small enterprise category, credit access remains a major challenge — especially in semi-urban and rural areas.
Techfino’s branch-led, tech-powered model provides a rare blend of physical presence and digital agility, making it uniquely positioned to capture this underserved market.
The Road Ahead
With fresh capital, a growing footprint, and deep expertise in secured lending, Techfino is not only chasing scale but also shaping the future of inclusive credit delivery in India.
If its execution stays on track, the company could become a go-to lender for India’s informal economy—a segment long ignored by traditional banks and fintechs alike.
