Shell Foundation teams up with India IntelleCash to provide commercial loans

New Delhi, Sep 19 (Calcutta Tube) The Britain-based Shell Foundation has teamed up with a non-banking finance company in India IntelleCash to provide commercial loans at competitive rates to small businesses in energy and infrastructure sectors in the country.

The credit facility will provide short-term working capital of less than Rs.1 crore against specific anticipated cash inflows, such as an order or government subsidy. Duration of the loans will be less than 12 months.

The facility aims to address the structural gap that currently exists in the financial market, mainly the unavailability of ‘small loans’, which is a key bottleneck in the growth of small businesses, the company said in a statement.

Besides financial assistance, the facility will also provide business and financial advisory services that will help SMEs to grow and to reach out to banks for further funding.

Shell Foundation and IntelleCash, which specialises in micro-finance, expect the new facility to cross a level of over $10 million in the next two to three years.

‘One of the key reasons why small businesses in India experience difficulty in achieving scale is because they are unable to attract debt financing precisely when they need it most,’ said Simon Desjardins of Shell Foundation.

He attributed this to the low risk appetite of banks, coupled with the higher cost and longer time involved in raising equity.

‘More importantly, banks and other financial institutions, including venture capital or private equity funds tend to focus on larger deal sizes, typically over a crore and often much higher. This puts small enterprises at a disadvantage.’

The credit facility in India would be managed by IntelleCash offices in Delhi, Mumbai, Hyderabad and Nagpur.

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