Caspian Debt partners with Villgro to provide debt access to early-stage startups

Bangalore: Caspian Debt, a digital corporate lending services company has partnered with Chennai based Villgro, a leading incubator of early-stage social enterprises, to provide debt solutions to impact-focused startups that aim to create a positive social or environmental impact beyond financial returns. Villgro’s portfolio company, Bharat Rohan, a Lucknow-based Agri-tech startup was the recipient of the first loan disbursed for INR.25 lakh. Bharat Rohan uses unique UAV/drone based hyperspectral Remote Sensing and artificial intelligence to make precision agriculture, integrated pest management and contract farming real and viable.

Caspian Debt will work closely with Villgro over the year to identify early-stage startups in impact sectors like Healthcare, Clean Energy, Food & Agri and Education, and provide them with small-ticket quick loans ranging from INR.10 to 25 lakh. The objective is to provide debt access to impact focused startups by creating a Guarantee-backed product to help de-risk these collateral-free loans.

Through this partnership, Caspian Debt and Villgro will help social startups via a 2-pronged approach. Firstly, it will solve the grave issue of access to capital, by making collateral-free debt accessible to social enterprises at industry standard interest rates. This will in turn also help maintain a good credit history while ensuring the sustainability of the business. In addition, both Caspian Debt and Villgro will use their experience and leadership expertise to provide strategic support to the founders.

“Emerging social enterprises in India face the challenge of having limited access to debt due to the lack of credit history and an existing negative feedback nexus between credit history and access to debt. The long gestation period of government schemes, along with considerable uncertainty hampers planning and execution. The nascent stage of venture debt coupled with a very low-risk appetite for early-stage startups is also one of the reasons for the limited access to debt. Moreover, early-stage founders sometimes lack the knowledge of building readiness for access to debt, and the significant role of debt in their business,” said S Viswanatha Prasad, Managing Director, Caspian Debt.

“Through this partnership with Villgro, we will provide the first set of debts by the end of Q3 2021. We hope to help start-ups from high impact sectors to gain independent access to debt, progressively improve their debt limits, and in the long-term benefit from decreased interest rates. We look forward to working closely with the team at Villgro to identify these promising startups,” he added.

“Invention based enterprises face a near impossible task of accessing capital during their early days. This partnership is built on the insight that it only needs a small amount of capital to catalyze business operations, and that credit risk can be reduced using innovative methods to enable access to this capital. Villgro has found an ideal partners in Caspian Debt to address this significant challenge in the early days of a startup.” said Srinivas Ramanujam, CEO Villgro India.

Caspian Debt has been a harbinger in identifying promising startups, and has been providing debt funds to sectors like Food and AgriTech, Clean Energy and Education for over 7 years now.