The platform is on a mission to transition chit customers to formal financing.
Hyderabad-based fintech startupCredRight on Thursday announced to have raised $2.7 million from 9 Unicorns, Spearhead Capital and Venture Catalyst, along with existing investors YourNest, Accion Venture Labs, and prominent angels.
The funds raised will be utilized to increasing the managed loan book, expanding the team size, investing in tech platforms and analytics.
“CredRight believes that lending is an underwriting and collections business first and the funding during Covid times is a great validation of our sound operational and productivity metrics. This fundraise will provide CredRight more fuel to transition chit customers to formal lending with access to simple, fast, flexible, and transparent loans,” said Neeraj Bansal, co-founder, and chief executive officer, CredRight.
CredRight is a data-driven lending platform that facilitates credit to small businesses and MSMEs via NBFCs and Banks. It has built a tech-based distribution model to reach out to India’s 10 million registered chit subscribers that are largely located in tier-II and tier-III cities. More importantly, the platform uses a proprietary credit-modeling algorithm that leverages chit data to build objective credit profiles.
“India is run by its 63 million small businesses, but in the absence of accessible capital, they struggle to scale to the next level. According to recent reports, less than 15 per cent of SMBs in the country have access to institutional lending. CredRight has deployed an end-to-end digital process, which enables small businesses to get a loan in the bank account within 3-5 business days. Their product has the potential to bring large-scale revolution in the SMB lending, and can scale rapidly. We are looking forward to supporting their journey in the coming years,” commented Dr Apoorva Ranjan Sharma, co-founder and managing director, 9Unicorns.
We have been a part of CredRight’s growth story since 2018. The company has significantly scaled up and built a strong team since we first invested. Its underwriting model, using proxy data from chit funds, allows it to have one of the lowest NPAs in the industry during the pandemic. With the recent round of funding, we are confident that the company would be able to grow its loan book 4-5 times," added Sunil K. Goyal, managing director, YourNest Venture Capital.
CredRight has disbursed more than INR 50 crore worth of loans to more than a thousand customers.