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CreditMantri, which provides credit management services to lenders and borrowers, has raised about Rs 16 crore ($2.5 million) in the first round of institutional funding from IDG Ventures India, Elevar Equity, and Accion Venture Lab.
The company will use the money to broaden and accelerate its platform development and build its user base.
According to Ranjit Punja, CEO and co-founder, CreditMantri, customers can access their credit score through CreditMantri, which will also help them match the lenders so that they get competitive rates of interest. “The intention,” says Punja, “is to put the customer in control so that he or she gets the best possible terms.”
CreditMantri will help those customers who do not know their credit score to obtain one and then put them in touch with lenders. In case of customers who have a poor credit score, it will help them improve their score. However, if the customer is in dire need of money, CreditMantri will help that customer get in touch with lenders who are prepared to lend to someone whose credit score is poor, in which case the interest rate may be higher.
The company deals with three categories of customers — those with a good credit score, those who do not know their credit score, and those with a poor credit score. It charges the third category of customers only and also gets compensated by the lenders for putting them in touch with prospective customers.
According to Punja, in the next six to nine months, CreditMantri will move to a model where it gets revenues only from lenders, providing the service free to all categories of customers. It deals only with individual customers and not companies.
He said CreditMantri has tied up with Equifax, a consumer credit reporting agency, and is in talks with Cibil.
A press release quoted TC Meenakshisundaram, Founder and Managing Director, IDG Ventures India, as saying that the need for lenders to better understand the customers made CreditMantri a compelling proposition for his firm to invest in. Likewise, Jyotsna Krishnan, Director and Head of Investments, Elevar Equity, said there were still millions who did not have access to formal banking channels and for those who do, over 60 per cent of the bank loan applications get rejected due to negative or no credit history. CreditMantri was looking to solve this problem and, hence, Elevar was investing in the venture. Vikas Raj from Accion Venture Lab, which invests in innovative financial inclusion start-ups globally, said CreditMantri met Accion’s objectives of making affordable financial services to all.
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