Accion Venture Lab, the world's leading seed-stage investor, YourNest, an early stage venture capital fund and few prominent angels have jointly invested Rs. 9 crore in the Hyderabad-based fintech startup CredRight.
A data driven lending platform, CredRight provides credit to unserved and underserved micro, small, and medium enterprises (MSMEs).
The company partners with chit funds, which are similar to Rotating Savings and Credit Association (ROSCAs) in the United States but use a reverse auction to distribute pooled funds - across India to acquire customers and use previously untapped chit data, along with other data points, to underwrite a loan for a customer.
"CredRight plans to further invest in technology, grow its team, and continue its expansion plans to reach even more unserved and underserved customers," said Neeraj Bansal, co-founder and CEO, CredRight.
CredRight has partnered with chit funds companies that allows access to MSEs and their entire past credit history related to chit fund payments and defaults data. It is a data driven lending platform that provides credit to underserved micro, small, and medium enterprises (MSMEs).
"With tens of millions of India's MSMEs cut off from formal financing, CredRight's innovative new model and use of often-overlooked data can help small businesses thrive," said president and CEO of Accion, Michael Schlein.
"By using technology and data, CredRight is redefining how traditional concepts like chit funds can help to amplify financial inclusion," added Paarul Dudeja, Director of Investments for India, Accion Venture Lab.
"We find CredRight has gained access to hitherto untapped alternate credit data-sets to build and roll out a product for 'Bharat'," said managing director and fund manager, YourNest Venture Capital, Sunil Goyal.
"Chit funds have been serving the financial needs of lakhs of households in India and like Yoga or Ayurveda, has stood the test of time. With the advent of companies like CredRight who are inducing a healthy dose of digital technologies and risk-based algorithms, Chit Funds can prepare for the oncoming era better and meet the unstated needs of their subscribers better as well as reach out to young generation with more confidence," said T. S. Sivaramakrishnan, General Secretary of All India Chit Fund Association.
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