India: Lendingkart lays off 30% of its staff as coronavirus impacts biz

Photo by James Yarema on Unsplash

Fintech digital lender Lendingkart has laid off 30% of its workforce, as business volumes of digital lending firms continue to be impacted, due to the covid-19 induced lockdown. This move is expected to impact more than 200 employees of Lendingkart, which has a total workforce of 675 staff members.

“The outbreak of covid-19 and the resultant slowdown has had a tremendous impact on the economy. This period has had a debilitating effect on the MSME sector where everything has come to a virtual standstill. NBFCs have been significantly impacted, with loan disbursements coming to a halt and moratorium impacting collections. We have been compelled to take some measures to rationalise our employee base across offices to ensure long term sustainable business,” said Lendingkart in email response to Mint’s queries.

While 15-20% of the staff is being let go due to an annual appraisal exercise, the decision to make additional layoffs was made keeping in mind the impact on the lending business in coming months, as digital lenders in the country struggle with liquidity and other challenges.

In addition to this, Lendingkart also said that the impacted employees will be on the company payrolls for the next 3-5 months, serving their notice, with insurance and medical insurance being provided to them for this period.

Earlier this week, Lendingkart announced that it has raised a total of 319.24 crore as a part of its Series D round, led by existing investors Fullerton Financial Holdings Pte Ltd., Bertelsmann India Investments, Sistema Asia Fund and IndiaQuotient.

“It is clear that digital lending businesses will continue to struggle, and will have to take such tough calls, with the RBI announcing the extension of the moratorium on term loans for another 3 months and considering the massive liquidity crunch which digital NBFCs are facing,” said a founder of a digital lending startup, which didn’t want to be named in the story.

On Friday, the Reserve Bank of India announced the extension on term loans for another 3 months till 31 August.

In March, the Digital Lenders Association of India (DLAI) which represents over 80 lending firms had reached out to the government and RBI, requesting that RBI’s moratorium, first announced in March, should also be extended to retail borrowers and digital lending platforms, by Banks and non-banking financial companies (NBFCs).

Further, digital lending marketplaces which work with several banks, NBFCs and digital lenders reported that approval rates of new loans were down by 75% during the lockdown.

Digital lenders have also been asking for full digitisation, and allowing eKYC and eSign mandates, from the regulator, for disbursing new loans, in a bid to curb the requirement of taking wet physical signatures from borrowers.

This article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.