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Fintech start-up CredRight has secured $9.7 million in a combination of equity and debt funding.
The equity capital raise was led by Michael & Susan Dell Foundation with participation from other investors including YourNest, Spearhead Capital, 9Unicorns and AccionVenture Lab. The debt part of the funding was from Blacksoil, Caspian Debt, RevX Capital, and Western Capital.
The funding will be used to expand into new locations and strengthen its technology stack, the company said.
The Hyderabad-based fintech, founded in 2016 by Neeraj Bansal and Vineet Jawa, aims to bridge the credit gap for micro, small and medium enterprises (MSMEs) in Tier-3 and 4 towns.
“We have served more than 5,000 nano enterprises, and this fundraise will help us expand our reach exponentially. Our phygital model, unique underwriting ability and deep understanding of nano enterprises helps us reach remote areas and provide meaningful loans whilst ensuring profitability,” said Bansal.
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According to the Reserve Bank of India (RBI), only 10 per cent of MSMEs have access to formal finance. This lacuna is compounded by the limited ability of commercial banks and traditional lending institutions to extend their services to remote locations.
CredRight aims to connect lenders with small business owners and avert the latter’s dependence on high-interest moneylenders.
According to the company, nearly 63 million MSMEs in India face a credit shortfall of around $500 billion.
The start-up says it has achieved 10x growth in assets under management (AUM) over the past three years. It targets an AUM of Rs 2,000 crore over the next three years.
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