CredRight raises Rs.9 Crore pre-Series A funding from YourNest & Accion

•CredRight provides unique access to micro, small, and medium enterprises (MSMEs) leveraging chit funds

•YourNest and Accion Venture Lab along with a few prominent angels invested in CredRight

•YourNest Venture Capital Fund is an early stage fund focused on pre-Series A investments

•Accion Venture Lab is the seed-stage investment initiative of global financial inclusion leader Accion

Hyderabad, May 31, 2018 – Accion Venture Lab, the world’s leading seed-stage investor; YourNest, an early stage venture capital fund; & few prominent angels have jointly invested Rs. 9 crore  in the Hyderabad-based fintech startup CredRight,  a data driven lending platform that provides credit to unserved and underserved micro, small, and medium enterprises (MSMEs). 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.

Mr. Neeraj Bansal, Co-founder and CEO, CredRight said, “CredRight is aiming to disburse Rs. 100 Cr in the next 12-15 months. 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 unserved and underserved customers. 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.”

CredRight has partnered with chit funds companies that allows access to MSEs &; 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 MSMEs. CredRight partners with chit funds across India to acquire customers and uses previously untapped chit data, along with other data points, to underwrite a loan for a customer. RBI Registered chit funds in India have 5 million subscribers, with 50% being MSME subscribers. By leveraging its proprietary machine learning based credit algorithm, CredRight is able to build a significantly better picture of cash flows, ability to repay, and willingness to repay for any applicant. Due to its end-to-end digital process, CredRight can approve loans within 24 hours and disburse funds within three business days.

“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.

“For decades chits are a trusted source of savings and credit in India. 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. The inherent savings led re-payment plan, and the obvious benefits of the fraternities build around friendships, brotherhoods and neighbourhood allows better adherence of loan re-payments. We find CredRight has gained access to hitherto untapped alternate credit data-sets to build and roll out a product for ‘Bharat’,” said Sunil Goyal, Managing Director & Fund Manager, YourNest Venture Capital.

“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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About CredRight

Hyderabad based CredRight facilitates institutional credit to micro & small entrepreneurs leveraging ROSCAs/Chit Funds in India. Mr. Sivaramakrishnan – Founder & General Secretary of AIACF, Vineet Jawa – Serial Entrepreneur & Tech Enthusiast & Neeraj Bansal – Financial Services Technology and M&A expert, combined forces to create CredRight with the mission of making Small Businesses avail credit a simple & hassle-free task. Top Chit Funds in India, store the transactional history of their subscribers in digital format, which is akin to Credit Bureau data & using analytics on these data points provide wealth of information on small businesses has developed “a unique proprietary machine learning algorithm”, which leverages past chit repayment data of subscribers and based on it sanctions loan within 1-24 hours and disburse money within 3 working days. More at https://www.credright.com

About YourNest

Founded in 2012, YourNest is an early stage venture capital fund that invests in proven revenue, Pre Series-A Start-ups. The fund believes in the new connected economy represented by the Internet of Things (IoT), Robotics, Electronic System Design, Enterprise SaaS comprising Artificial Intelligence, Machine Learning, Block Chain to name a few and Digital India.

YourNest considers itself an “Enabler” of Entrepreneurs that provides Nurture Capital founded by five partners with extensive operational and leadership development skills. They have established experience in global exits on earlier investments – besides a well known advisor base. The fund has an enviable network of professionals, innovators, business leaders, coaches and mentors, and offers one of the best eco-systems for any startup.

YourNest’s Fund I of Rs.90 Crores, has been fully committed to 16 companies. The Fund was the “Youngest VC Fund” in India to be featured in the Top 10 Ranking by Returns in Preqin’s Ranking of VC and PE funds across Sectors and Vintage. “YourNest India VC Fund II” of Rs.300 Crores is focused on leveraging evident unmet funding needs ranging from $0.5-1M in its chosen domains. More at http://www.yournest.in/

About Accion Venture Lab

Accion Venture Lab is the world’s leading seed-stage investor in fintech for the underserved. Venture Lab invests capital in, and provides support to, innovative fintech startups that increase access to, improve the quality of, or reduce the cost of financial services for the underserved at scale. Since launching in 2012, Venture Lab has deployed over US$10 million across more than 30 startups that work in over 20 countries worldwide. Venture Lab is a part of Accion, a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. Accion catalyzes financial service providers to deliver high-quality, affordable solutions at
scale for the three billion people who are left out of – or poorly served by – the financial sector. For more than 50 years, Accion has helped tens of millions of people through its work with more than 90 partners in 40 countries. For further information, visit https://www.accion.org/venturelab.

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