Frequently Asked Questions
We operate all over India. Apart from Hyderabad, we have branch presence in Bengaluru and NCR.
A wholesale lending vertical that provides financing to retail financial institutions and A corporate SME lending vertical that lends to Non-Financial Institutions. We specialise and operate in sectors that are crucial for positive social and economic development including:
- Financial Services (Microfinance, Small Business Finance, Affordable Housing Finance),
- Food & Agribusiness
- Clean Energy & Energy Efficiency
- Education & Skill Development
- Affordable Housing
- Clean Environment
- Water and Sanitation
- ICT & Physical Connectivity
As of now, we do not lend to the waste management and recycling industry.
The documents required during the due-diligence process include the following:
- 3 year Audited Financial Statements
- Certificate of incorporation
- Articles and Memorandum of Association
- Business Plan
- Operational Manuals
- Key policies
- Internal Audit reports
- MIS reports
- GST returns
- Bank Statements
- Profiles of Key Management
- Profiles of board of directors
Any other information relevant to the business.
We take our processes very seriously. We invest time in understanding the businesses and would like a similar commitment from our partners. We receive an advance loan processing fee from our potential customers before scheduling the physical due diligence. In an unlikely event of loan not getting sanctioned we refund the processing fee to the company.
|Particulars||Term loan||Purchase Order Financing|
|Capital use||Growth Capital||Working capital|
|Principal||Fixed Amount drawn in one or two tranches||Pre-approved limit|
|Interest||Charged on entire Amount||Only on amount availed|
|Disbursement||Based on agreed tranches||Based on Purchase Orders received.|
|Repayment||As per a pre-agreed repayment schedule||Anytime upto 6 months. Can be prepaid without prepayment penalty. Once repaid, the limit gets freed up to draw down again.|
We generally extend loans to for-profit companies (including Producer Companies and co-operatives). We do not generally lend to non-profits except in the case of microfinance on a selective basis. The profile of enterprises we lend to includes:
- Profitable companies
- Loss making companies with a strong equity cushion and visibility of profitability in the next 12-18 months.
We do not consider pre-revenue companies or companies with less than INR 30 Mn in revenue. We do consider companies with slightly lower revenues on a case to case basis when the companies are backed by an entrepreneur with significant experience, track record and a significant equity cushion.
All our investees must have ethical, transparent operations, and good governance practices. We do not invest in not-for-profit organisations (NGOs) or proof-of-concept or R&D programs. We also do not consider any businesses that fall within our Exclusion List or do not meet any of the impact characteristics as mentioned in the next question.
We lends to businesses that have positive impact on society or the environment, which have one or more of the following characteristics:
- targeted at lower-income households in rural or urban locations.
- Enable access to products or services to underserved / non-Tier 1 locations. Preferably rural.
- Enable access to products or services in low-income Indian states.
- Generate or enable access to cleaner forms of energy.
- Create jobs for the underemployed.
- Contribute towards the adoption of sustainable practices for a cleaner/safer planet.
- Contribute to gender equity.
We are modelled to be a specialised lender for early and Growth stage SMEs and our experience allows us to identify and manage risks associated with investing in such businesses. Our decision to lend is based primarily on the ability of the business to generate cash flows and the quality of the promoters. Mortgage Collateral is an important but secondary consideration.
- Deep understanding of key Impact sectors : We recognise that one of the key challenges that all early and growth stage businesses face is the lack of access to appropriate finance based on the needs of the business. We established Caspian Debt with a specific mandate to address this gap in our chosen sectors. Over time we have developed deep sector expertise which helps us get a better understanding of business models and funding gaps.
- Experience : We have a 15 year track record in making successful debt and equity investments in early and growth stage businesses with positive social and environmental impact. Caspian debt leverages this experience to provide debt to high quality enterprises which relies on judging the business potential and cash flows rather than quality of mortgage collateral.
- Access to Networks : In order to ensure that all investment decisions are backed by a sound understanding of the underlying business, we also leverage the understanding of a network of experienced practitioners, advisors and specialised partner organisations. All clients benefit directly or indirectly from the experience and the networks that we have.
- Responsive : We strive to respond to the potential and current customers in shortest possible time. We are rated as the most responsive lender by our investee companies.
- Transparent : The term-sheet we provide to our customers carries all the costs and expectation from them. There are no hidden costs or surprises which surface later. We not only tell you if we are lending to you but, importantly, also share with you, our reasons, in case we are unable to fund you.
- Customised Solutions : We focus on the unique needs of each high quality business and provide a largely customised solution that is structured to help the business grow.
- Aligned interests : We invest our own funds in the businesses and hence our success is measured by the success of the businesses we lend to.