Hyderabad-based fintech startup CredRight Pvt Ltd has raised $2.7 million (around Rs 20 crore) in a new financing round from 9Unicorns, Spearhead Capital, Venture Catalyst, existing investors YourNest, Accion Venture Labs, and angels.
The startup facilitates collateral-free business loans via NBFCs and banks to micro, small, and medium enterprises (MSMEs) on the back of expected chit fund receivables.
Using its machine learning-based credit algorithm and digital processing capabilities, the company claims that its platform can analyse an applicant’s cash flows, ability, and willingness to repay, and it can approve loans within 24 hours and disburse funds within three business days.
CredRight said It has built a tech-based distribution model and aims to reach out to India’s 10 million registered chit subscribers that are largely located in Tier-II and Tier-III cities. The platform also uses a proprietary credit-modelling algorithm that leverages chit data to build objective credit profiles.
"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, allowed 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," Sunil K Goyal, managing director, and fund manager at YourNest Venture Capital, said.
To date, CredRight has disbursed over Rs 50 crore ($7 million) worth of loans to more than a thousand customers.
SME lending is one of the fastest-growing sectors in the fintech space.
In June, Capital Float raised Rs 50 crore ($6.8 million) in debt for 3 years from financial inclusion funds managed by Triodos Investment Management. It has raised over Rs 200 crore in debt since January.
In April, StashFin raised $40 million in its Series B round of funding from Altara Ventures, Uncorrelated Ventures, Integrated Capital, Kravis Investment Partners, Saison Capital, and Tencent Cloud Europe BV.