Fintech start-up offering tools to reduce credit risk raises $3.2 million

Less than 15 per cent of the 50+ million small businesses in India have access to formal credit

Crediwatch, a Bangalore-based TechFin company building AI/ML tools to help the financial services industry reduce credit risk has secured $3.2 Million in Series-A funding. Led by ARTIS Labs, the funding will accelerate R&D and commercialization of Crediwatch’s platform, the company said in a statement.  

Prior to this, Crediwatch has raised $1.6 million from Modern India, family offices of Vijay Kumar Jatia, Contrarian Vriddhi Fund, Vaibhav Domkundwar’s Better Capital, Mekin Maheshwari (Flipkart) and Pithambar Gona (former MD of Blackstone PE Asia) bringing the total funding till date to $5 million.

Crediwatch is a ‘Data Insights-as-a-service’ company that provides lenders, businesses with actionable credit intelligence on private entities they need to improve trust and increase their lending and trading activity. Crediwatch does this with no human intervention by deploying the latest practical AI and technology tools that provide the most reliable comprehensive real time inputs. 

Less than 15 per cent of the 50+ million small businesses (companies, partnerships and proprietorships) in India have access to formal credit. The debt financing gap of the SME is over $1 trillion. Lenders have written off more than $100 billion due to bad debts in the last three years. The current friction cost of lending to the SMEs is 6-7 per cent. Corporates have large vendor/supplier relationships that get exposed to similar financial risks that increase the trust deficit. 

Having provided insights on 50,000+ businesses and $7 billion loan portfolio, Crediwatch aims to fill this void by offering a dynamic “Trust Score” derived from millions of data points that are extracted and analysed across thousands of formal and alternative sources to help lenders assess borrowers and monitor them close to real time.  

“The ecosystem needs a dynamic business information exchange to create transparency and a continuous monitoring of borrowers to weed out bad cases early” said Meghna Suryakumar, founder and CEO. “Our vision is to reimagine SME credit by measuring trust through verifiable data, insights and good behaviour”

Sharing his insights, Stuart Peterson, General Partner with Artis, commented, “The increasing digitization of business data against the backdrop of a failure of conventional credit rating and underwriting methods provides a unique opportunity to create a scalable business using AI/ML to provide unprecedented insights. These are massive trends that are just now beginning to play out within India and Crediwatch finds itself ideally positioned to lead this digital revolution."

“We have already seen various algorithm-based lending models trying to address the issues pertaining to digital lending, but the lack of a data utility platform for the industry has created a gap. Crediwatch is one of the few businesses that is committed to addressing this gap and we are delighted to offer our support” Abstract Ventures Partner Ramtin Naimi said in a statement.

Leading financial institutions like SBI, KVB and RBL Bank and NBFCs like ABFL and Capital Float subscribe to the Crediwatch’s Insights platform and Early Warning Signals to help manage their credit on a more dynamic basis.