Business
Fintech startup CreditVidya raises $2 million from Kalaari Capital
Aiming to further expand its team and strengthen its technology platform, financial technology start-up CreditVidya that leverages non-traditional data sources to provide credit scores to individuals, has raised $2 million dollars from VC fund Kalaari Capital.
The three-year-old Mumbai-based startup has also received Rs 1 crore from Paragon Partners Managing Partner, Siddharth Parekh, an early backer of the venture in his personal capacity, as well as from a clutch of employees.
Abhishek Agarwal, co-founder and chief executive at CreditVidya said that will help the company expand its technology and data science team from the current 37 members to 70 by the end of the financial year and strengthen its technology platform.
“The company uses non-traditional data sources such as the mobile phone recharge pattern of an individual, utility bill payments, e-commerce purchase behaviour etc. to provide a credit score for individuals who do not have a traditional credit score,” said Agarwal.
Currently, most banks and other lending institutions rely on credit scores provided by credit bureaus such as CIBIL.
He added, “In order to give a credit score, the traditional credit bureaus have to rely on the repayment history of loans and credit cards. But if you have never taken a credit card or a loan earlier, then it’s very hard for a person to get a score and thus difficult to get a loan,” added Agarwal.
Founded in 2013, CreditVidya has tied up with several financial institutions such as Bajaj Finserv, Fullerton India and Shriram Housing Finance and gives these lenders the ability to score customers, minimise fraud rates and accelerate verification processes of potential customers.
Raj Chinai of Kalaari Capitals, said, ”There are about 350 million customers in the income bracket of Rs.2 lakh to Rs.5 lakhs a year whom banks are unable to lend because they are credit-invisible. A lot of potential customers that banks target on their digital platforms are young people who might be completely new to credit and thus lacking a formal credit score.”
