Short term loans will be offered to JSW’s MSME clients. Credit: rupixen.com on Unsplash.

Indian multinational conglomerate JSW Group is looking to invest up to INR4bn ($48.3m) in a captive non-bank lender in a bid to expand into lending space, the Economic Times reported, citing PTI.

The non-bank finance company (NBFC), which will operate as a unit of JSW One Platforms (JSWOP), will cater to the financing needs of customers on the newly minted e-commerce unit, JSWOP CEO Gaurav Sachdeva said in an interview.

The rationale behind the foray into lending is that, currently, JSWOP’s clientele the micro, small and medium enterprises (MSME) are not served by traditional players as well as they should be, said Sachdeva.

Over the next two years, up to INR4bn will be invested in the NBFC and it is part of the $40bn capital investment planned for the e-commerce arm by the financial year 2027.

“It will only be e-commerce customers who will get the financing. We are building a captive (NBFC)..its part of the e-commerce business, it is not an independent go-to-market company,” Sachdeva noted.

The financing arm will offer short-term loans for up to 90 days to increase the throughput of the overall e-commerce business.

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JSW chief said a financial services company has already been set up within JSWOP and it will reach out to the Reserve Bank of India for a licence to operate as an NBFC in the last quarter of the financial year 2023.

“On the credit front, if we have to extend it to the JSW Group at some point of time, we will be (open). It will require more capital,” he added.

The unit will have a team of 200 people and work is already underway to build that team. Also, the technology stack will be the core of operations, Sachdeva said.