New Delhi, June 4 (KNN) Accion Venture Lab, the world’s leading seed-stage investor and YourNest, an early stage venture capital fund along with few prominent angels have jointly invested Rs. 9 crore in the Hyderabad-based fintech startup CredRight.

Founded in 2016, CredRight is a data driven lending platform that provides credit to un-served & underserved micro, small, and medium enterprises (MSMEs). 

With this new injection of capital, CredRight plans to further invest in technology, grow its team, and continue its expansion plans to reach even more un-served & underserved customers, said Neeraj Bansal, Co-founder and CEO, CredRight.

He said, it is aiming to disburse Rs 100 crore in the next 12-15 months.

Further, he added “chit funds are the most underappreciated financial inclusion story in India. Registered chit funds, well regulated by States & RBI, cater to more than $10 bn credit demand in India, addressing more than 5 mn missing middle of India for over a century.”

With digital channels and complimentary lending, the industry has the potential to grow many folds and expand the financial inclusion story even further, Bansal added.

CredRight partners with chit funds, which are similar to Rotating Savings & 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.

“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 Michael Schlein, President and CEO of Accion.

“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.

CredRight team has intelligently built an algorithm to use the reliable data on the members available with the chit funds. This strong digital platform allows CredRight to have a lower operational cost, conduct multivariate analysis and a continuously evolve its credit model, said Sunil Goyal, Managing Director & Fund Manager, YourNest Venture Capital.

He said, we find CredRight has gained access to hitherto untapped alternate credit data-sets to build and roll out a product for ‘Bharat’.

“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.