ImpactAlpha, March 27 – Bangalore-based New Street Technologies partners with banks to facilitate loans to small businesses through a blockchain-based lending platform. It has raised $2 million, led by impact investor Unitus Ventures.
One of the most commonly cited reasons that banks don’t lend to small businesses is the cost of due diligence and servicing small loans. New Street Technologies works with banks to retrofit their existing tech systems. Its blockchain-based system helps banks “reduce operating costs and increase efficiency across customer sourcing, documentation, verification, disbursements and collections,” New Street’s website states. It claims the system also helps lenders vet and approve borrowers more quickly.
“It’s the first example we’ve seen of a company successfully deploying a private blockchain to facilitate microfinance transactions,” Unitus Ventures’ Will Poole told ImpactAlpha.
New Street’s platform has been used to originate $4.3 million in loans since the company was founded in 2017. The seed investment round will allow New Street’s technology to facilitate $145 million in loans over the next three years, YourStory reports.