Paytm-backed CreditMate in talks with big banks to contain loan defaults

Paytm backed fintech startup CreditMate is in talks with some of the big banks in the country to help stem the NPA (Non-Performing Assets) crisis by streamlining collections.

“Conversations are on with the big banks. We are ready to partner and share our technology powered platform. We have observed that the problem in India is not on lending but on the collection side. Today, we handle 25 lenders and after five months of going live, we manage $100 million on our platform”, said Jonathan Bill, founder and chief executive officer, CreditMate.

Bill refused to disclose names of the banks. Trends show that credit advanced by key public sector lenders and their private counterparts had a major share in the bad loans crisis. The phenomenon was opposed to small ticket loans offered by fintech lenders and Non-Banking Financial Companies (NBFCs) where loan defaults were comparatively much lower.

Industry data shows that each month, 10-15 per cent of loan repayments fail to be collected from the bank accounts on the due date. The figure translated into 11 per cent of the country's NPAs. CreditMate's technology has led to 15-20 per cent surge in collections from the lenders. With over 200 million consumer loans disbursed annually, CreditMate is in a vantage position to tap the lending market growing 28 per cent year-on-year

Mumbai-based CreditMate started off as a fintech lender but is now focusing whole heartedly on collection.

Presently, CreditMate's customers include three unicorns and a string of fintech lenders and tier-I NBFCs. Over the next three months, it expects to cross 50 customer institutions.

“We partner with  25 different lenders across the country. They upload the collections every month in a secure environment using API. Those collections come to our platform. Our platform has a bunch of vendors attached to it”, Bill said.

Last month, CreditMate grew 60 per cent month-on-month. This month, it expects to grow more than 80 per cent given the scale of collections problem, data security, borrower first positioning, real time reporting as well as the focus on reduced costs and improved performance.

CreditMate aims to build Asia's largest collection software platform to resolve issues such as data security, collection agency performance and reporting and accounting for all bounces and NPA. The company did not offer a timeline to achieve this.

As of now, it offers three products- CreditMate Collect, CreditMate Pay and CreditMate Score. CreditMate Collect is a collecting platform equipped with Application Program Interface (API) driven integration, which provides real-time tracking of payment status, payment integration across gateways and customized regional communication. CreditMate Pay is an offline, secure network that offers borrowers options to pay their EMIs via various digital payment solutions such as UPI and eNACH (electronic National Automated Clearing House) mandate setup. The offline system is backed by over 1,00,000 cash-drop points across the country and over 1000 executives for cash pickups.