FINTECH CREDRIGHT RAISES INR 78 CRORE IN EQUITY & DEBT FINANCING ROUND FROM MICHAEL & SUSAN DELL FOUNDATION, YOURNEST AND OTHERS TO EXPAND CREDIT ACCESS FOR MSMES

CredRight, a data-driven tech enabled NBFC focused on serving nano enterprises, announces that it has raised funding of INR 78 crore (approximately 9.7 million USD) through a combination of equity and debt capital.

The equity capital funding was led by the Michael & Susan Dell Foundation with wider participation from existing investors including YourNest, Spearhead Capital, 9Unicorns and Accion Venture Lab, signifying strong faith in the company’s value proposition and the founding team’s execution ability. The debt capital funding was provided by Blacksoil, Caspian Debt, RevX Capital, and Westen Capital.

CredRight, which focuses on financial inclusion by providing much-needed institutional debt capital to MSMEs in Tier 3 and 4 towns, will utilise this additional capital to expand further into new locations, strengthen its technology stack and work towards positively impacting the lives of small business owners by helping them access formal finance.

On the fundraise, Neeraj Bansal, cofounder of CredRight, said, “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. We have served more than 5,000 nano enterprises, and this fund-raise will help us expand our reach exponentially. Our phygital model, unique underwriting ability & deep understanding of nano enterprises helps us reach remote areas and provide meaningful loans whilst ensuring profitability. We are delighted to have successfully executed this fund-raise in a challenging environment and welcome the support of, the Michael & Susan Dell Foundation and, of our existing shareholders.”

Cofounded in 2016 in Hyderabad by Neeraj Bansal, an alumnus of BIT, Durg and IIM Lucknow, along with Vineet Jawa, an ISB alumnus and serial entrepreneur, CredRight is helping bridge the credit gap for millions of small and medium sized enterprises that do not have access to institutional debt as commercial banks and traditional institutional lenders find it prohibitive to distribute cost-efficiently in remote locations. As a result, small businesses are forced to rely on informal sources such as moneylenders who lack transparency and often charge very high interest rates.

According to the Reserve Bank of India (RBI), fewer than 10% of MSMEs in the country currently have access to formal finance. However, CredRight has emerged as a viable solution by utilizing physical distribution channels and employing an innovative credit underwriting approach based on analyzing small business cash flows, chit fund statements and agricultural incomes. This approach enables CredRight to serve MSMEs even in the most remote locations. In India, there is a staggering credit demand shortfall estimated at $500 billion from approximately 63 million MSMEs, and this shortfall continues to grow each year.

“We are delighted to partner with the CredRight team in serving the acute financing requirements of over 63 million MSME businesses in India,” said Geeta Goel, country director, Michael & Susan Dell Foundation. “The financing gap is wider still for nano entrepreneurs, businesses with an annual turnover between INR 1 and 10 million. These growing businesses account for approximately 20% of the MSME segment yet over 90% of them lack access to formal financing from traditional lenders. These entrepreneurs are the future of India, and Credright is creating opportunity for them, their families, and their communities across the country.”

Sunil K Goyal, Managing Director and Fund Manager at YourNest Venture Capital, said, “CredRight has one of the lowest NPAs in the industry using its innovative underwriting model based on alternate data. With CredRight recently receiving an NBFC license and with this round of funding, the company will be able to significantly grow its loan book exponentially. We continue to have faith in their business and their operating principles which is what inspired us to invest further in the team.”

CredRight has experienced a 10x growth in its assets under management (AUM) over the past three years. The company is targeting AUM of INR 2,000 crore over the next three years.