BIG PICTURE
Caspian Debt Provides Non-Dilutive Debt Capital to Start-Ups Which Are in Clean Energy & Sustainability Space At Caspian Debt, our mission is to enable the growth of professionally managed companies that can achieve in a responsible, sustainable, and transparent manner positive social & environmental impact. We provide customized collateral-free debt to companies set up by first-generation entrepreneurs in highly impactful sectors such as Food and Agriculture, Education, Healthcare, WASH, Financial inclusion, Microfinance, Affordable Housing, Clean energy states Avishek Gupta | Investment Director | Caspian Debt to Niloy from BISinfotech. During this candid chat, Avishek also shares about their lending process, criteria, and how they’re vitally looking into lending money and expanding its strategic focus across newer sectors. Edited Excerpts Below.
Q
How did Caspian Debt deal with the lockdown maintaining the demand and facing the heat of supply chain slowdown? Even before the lockdowns started, we asked the employees to start working from home and reorganized our processes to enable that. On the disbursals front, while we stopped new client onboarding at the end of the previous financial year, we continued disbursing loans in cases where clients had credit limits from us. Immediately after lockdowns were imposed and for the entire period after that, we remained in close touch with our SME and financial institutions clients to gauge impact on their businesses. In parallel, we transitioned our entire credit evaluation process into a virtual due-diligence based process. We also developed an in-house COVID risk framework and evaluated each of our company basis the framework. Using that framework, we were successfully able to implement the RBI and Govt directives around giving relief to customers through repayment moratoriums on a selective and objective basis. We also participated in the govt supported ECLGS programme via which we funded existing clients that met the govt specified criteria. Most of our portfolio companies had to shut operations during the initial period of lockdown but immediately after that, the companies dealing with agricultural commodities and health care services started
growing rapidly. We re-started onboarding new clients towards the end of June 2021. In the process of making new loans, we considered the covid risk framework to assess the immediate risk due to covid in addition to the normal evaluation that we do. We managed to stay financially strong and liquid to ensure continued support to our clients and were able to raise funding from both existing and new partners.
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What is your lending process and what are the criteria and portfolios do you look into before choosing companies for financing? At Caspian Debt, our mission is to enable the growth of professionally managed companies that can achieve in a responsible, sustainable, and transparent manner positive social & environmental impact. We provide customized collateral-free debt to companies set up by first-generation entrepreneurs in highly impactful sectors such as Food and Agriculture, Education, Healthcare, WASH, Financial inclusion, Microfinance, Affordable Housing, Clean energy. We look for companies that have attracted VC funding with a proven business model and path to profitability or profitable bootstrapped companies We evaluate companies on their Governance and Management, Processes and Systems, Business and Operational Risk and Financial performance. Our lending process includes inviting applications on our digital platform from the companies which go through initial evaluation for impact, governance and financial performance. Once the companies clear the initial evaluation or pre-due diligence phase it receives an indicative term sheet within 10 days of receiving the application. Once the terms are accepted, the companies go through the in-depth due diligence of business model, operating processes, review of customers, suppliers and management depth. In normal times, due diligence involves a physical visit to the company’s premises. The investment team puts up a credit note after satisfactory
20 12 | 2021 BISinfotech
