When you approach a lender for a loan, the lender uses the process of Underwriting to decide whether an applicant is creditworthy and should receive a loan. This is done by analyzing the applicant’s credit history, collateral and capacity. In India, it is the underserved customer segments that are greatly affected when it comes to credit approval. Many hopeful people are denied credit because they do not have enough data with the credit bureau to assess their creditworthiness. If you do not have a credit score, then you are denied a loan, which circles back to the inability to improve their credit score. So, how can people who are new to credit overcome this issue?
CreditVidya is the leading player in the alternative credit scoring space in India. A pioneer in the domain, the startup is leveraging alternative data, AI and machine learning to facilitate institutional credit for the underserved. It is offering ‘pay later’ loans that simplify supply chain finance, cash advance loans to extend working capital and term loans for the self-employed.
This Hyderabad-based startup was founded in 2013 by Abhishek Agarwal and Rajiv Raj. Prior to founding CreditVidya, Abhishek Agarwal served as the Head of Products and Data Strategy at Experian, a leading global credit bureau. Rajiv Raj is a banking veteran and was part of the team that introduced bureau scoring to India, via CIBIL.
“Fintech today is going to drive monetization, and credit is going to be the underlying factor that determines this shift. With more organizations looking to give financing options and seeking NBFC licensing, underwriting is going to be important. With our existing capabilities, companies can look at different underwriting and financial models, that in turn can be linked to a bank and extend credit to the company’s customer.”
– Abhishek Agarwal, Co-founder and CEO
CreditVidya helps lenders make critical decisions based on credit scores assigned to new-to-credit and thin file customers through non-traditional data sources. These sources can be behavioral (pending payments or categories of purchases), social networks and transactional (through recharges or ecommerce spends). All this information is received from the borrower’s smartphone or e-mails based on their permission. CreditVidya’s SDK is an Android Software Development Kit that can be integrated with native or hybrid Android applications. It allows a lender to collect consent-driven data. This unstructured data is then processed on CreditVidya’s AI and machine learning platform help lenders assess the credit risk of the applicant, even when they have scanty or no bureau credit scores.
CreditVidya’s products CVScore, IncomeX and Eve are helping a large section of the salaried and self-employed population become visible to lenders, by making it financially viable for banks and NBFC’s to underwrite customers for much smaller unsecured loans. About 55+ leading banks and NBFCs that share the company’s vision, rely on its products to manage the credit cycle end-to-end: Prospecting, Credit Underwriting, and Delinquency Management. With over 10,000 data points, CreditVidya’s credit underwriting model is 2x more powerful than traditional bureau scores, helping banks and NBFC’s underwrite 15% more individuals, including the completely new-to-credit segment (first time borrowers). To date, the startup has underwritten over 25 million individuals. Its products also help lenders cut the time of decision-making from several days to under five minutes, reduce costs, prevent fraud, and consequently, increase profitability.
The startup has launched its embedded financial services platform for MSMEs, Prefr, in partnership with Google Pay and Xiaomi India. Prefr will be powered by CreditVidya’s patented AI-powered cash flow underwriting platform that underwrites even first-time loan applicants accurately and efficiently. Prefr and Retailio have partnered to launch working capital limits for 100,000+ Retailio pharma retailers across India.
The CreditVidya Compass reports help you keep track of important indicators of the consumer economy in India – consumption, income, employment and savings.
The startup recently received a patent for its NLP and AI-based Unstructured Data Processing Framework called “FeatGen” from the United States Patent and Trademark Office. The patent reaffirms CreditVidya’s position as the pioneer of alternative data-based credit scoring in India.
CreditVidya raised a funding of $3 million in a round led by Bharat Innovation Fund in 2019, with participation from the founding members of Falcon Edge Capital – Ryan Khoury, Navroz D.Udwadia and Rick Gerson. This is an extension of its $5 million Series B round, which was raised in September 2017 led by Matrix Partners. The startup is utilizing the funds to expand its credit underwriting services to companies in various sectors that are looking to extend credit facilities to their customers.
According to a BCG report published in 2020, over $1 Trillion of retail loans will be disbursed digitally in next 5 years, and the digital footprint of the consumers will increase to 75 per cent from 50 per cent by 2023 in India. As an enabler of digital financing, CreditVidya is dedicated to its mission of making affordable credit accessible to more than 3 billion under-served people across the world.