Fintech CredRight Secures INR 78 Crore Funding to Expand Credit Access for MSMEs

• ByStartupStory     |    August 31, 2023

CredRight, a data-driven tech-enabled NBFC (Non-Banking Financial Company) with a focus on serving nano enterprises, has successfully raised INR 78 crore (approximately 9.7 million USD) through a combination of equity and debt capital. The funding round was led by the Michael & Susan Dell Foundation, alongside participation from existing investors including YourNest, Spearhead Capital, 9Unicorns, and Accion Venture Lab. The debt capital infusion was provided by Blacksoil, Caspian Debt, RevX Capital, and Westen Capital.

CredRight has been pioneering financial inclusion by extending much-needed institutional debt capital to MSMEs in Tier 3 and 4 towns. This new capital injection will be utilized to expand the company’s presence into new geographical areas, enhance its technological infrastructure, and contribute to the empowerment of small business owners by enabling them to access formal financing.

Neeraj Bansal, Co-founder of CredRight, expressed the company’s mission, stating, “MSMEs are the backbone of the Indian economy, and access to capital is the fuel that fires them. We are on a mission to make formal finance simpler, accessible, transparent, and faster.” He further noted that CredRight’s unique approach, which combines a phygital model, distinctive underwriting abilities, and deep understanding of nano enterprises, allows them to serve even the most remote areas while ensuring profitability.

Founded in 2016 in Hyderabad by Neeraj Bansal and Vineet Jawa, CredRight addresses the credit gap for millions of small and medium-sized enterprises that struggle to access institutional debt due to distribution challenges in remote locations. Traditional lenders often find it economically unfeasible to reach such areas, leaving many small businesses reliant on informal and expensive sources of funding.

CredRight’s innovative credit underwriting approach, which involves analyzing small business cash flows, chit fund statements, and agricultural incomes, has proven successful in bridging this gap. In a country where fewer than 10% of MSMEs have access to formal finance according to the Reserve Bank of India, CredRight’s approach shines a light of hope.

Geeta Goel, Country Director of Michael & Susan Dell Foundation, remarked, “We are delighted to partner with the CredRight team in serving the acute financing requirements of over 63 million MSME businesses in India.” She highlighted the significance of CredRight’s efforts to empower nano entrepreneurs, a segment often overlooked by traditional lenders.

Sunil K Goyal, Managing Director and Fund Manager at YourNest Venture Capital, echoed confidence in CredRight’s underwriting model based on alternate data, citing the company’s low NPAs (Non-Performing Assets). He anticipated significant growth in CredRight’s loan book with the recent NBFC license and the current funding round.

CredRight’s remarkable growth over the past three years, experiencing a 10x increase in its assets under management (AUM), exemplifies its impact. The company is now aiming for an AUM of INR 2,000 crore over the next three years.

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