Hyderabad-based fintech start-up CredRight Pvt Ltd has raised $ 2.7 million (around Rs 20 crore) in new round of funding from 9Unicorns, Spearhead Capital, Venture Catalyst, investors existing YourNest, Accion Venture Labs and Angel Investors.
The startup is facilitating unsecured business loans through NBFCs and banks to micro, small and medium enterprises (MSMEs) on the back of the expected claims of chit funds.
Using its machine learning-based credit algorithm and digital processing capabilities, the company claims that its platform can analyze an applicant’s cash flow, ability and willingness to repay, and that it can approve loans within 24 hours and disburse funds within three business days.
CredRight said that it has built a technology-based distribution model and aims to reach the 10 million registered Indian subscribers who are mainly located in Tier II and Tier III cities. The platform also uses a proprietary credit modeling algorithm that leverages chit data to create objective credit profiles.
“We have been a part of CredRight’s growth story since 2018. The company has grown significantly and built a strong team since we first invested. Its subscription model, using proxy data from chit funds, allowed it to have one of the lowest APNs in the industry during the pandemic. With the recent round of financing, we are convinced that the company would be able to multiply its loan portfolio 4 to 5 times, ”said Sunil K Goyal, Managing Director and Fund Manager at YourNest Venture Capital.
To date, CredRight has disbursed over 50 crore rupees ($ 7 million) in loans to over a thousand clients.
Lending to SMEs is one of the fastest growing sectors in the fintech space.
In June, Capital Float raised 50 crore rupees ($ 6.8 million) in debt for 3 years from financial inclusion funds managed by Triodos Investment Management. He has raised over Rs 200 crore in debt since January.
In April, StashFin raised $ 40 million in its Series B funding round from Altara Ventures, Uncorrelated Ventures, Integrated Capital, Kravis Investment Partners, Saison Capital and Tencent Cloud Europe BV.