Getty ImagesMUMBAI: UK-based fintech Wiserfunding is set to make its entry into India launching its Artificial Intelligence (AI) backed cloud-based credit risk assessment tool to help banks provide loans to small businesses.
The company is set to invest $3-5 million in India over the next three years to tailor credit risk models specifically towards Indian SMEs to reach an accuracy level above 80 percent, Wiserfunding’s CEO and co-founder Gabriele Sabato, told ET in an exclusive interview.
The investment will also be towards creating technology to connect to various public and private databases to source all inputs to fully automate its models, said Sabato adding that the company plans to cover 8.5 million Indian SMEs through its models by end of the financial year.
The announcement comes amid the impact of COVID-19 on small businesses in India where lenders have largely remained risk-averse in disbursing new credit to the MSME sector which Wiserfunding executives feel is because of “non-technology-based lending” where models have low prediction accuracy.
The London headquartered team will set its office in Mumbai which will be headed by Avantika Goel as the Country Head. The target is to partner with 3-4 banks and 8-10 NBFCs by 2021. Under Goel the company also plans to hire more staff and set up on-ground services as well.
“India is a large market with 42.5 million SMEs and there is an urgent need for an unbiased credit risk assessment service that can provide the business credit score and risk profile of any company within a few seconds using the cloud-based platform,” said Goel.
The London-based company was co-founded by Sabato and Professor Edward Altman who also invented the famous Altman score in the late 1960s which predicted a small business’ likelihood to go bankrupt.
The company uses an advanced version of Altman’s credit scoring model to predict credit risk. It uses artificial intelligence to assess the credit quality using financial history as well as publicly available structured and unstructured data - such as corporate governance, management experience macroeconomic indicators, Altman who is also a Professor of Finance, Emeritus, at the New York University’s Stern School of Business, told ET.
The company is set to invest $3-5 million in India over the next three years to tailor credit risk models specifically towards Indian SMEs to reach an accuracy level above 80 percent, Wiserfunding’s CEO and co-founder Gabriele Sabato, told ET in an exclusive interview.
The investment will also be towards creating technology to connect to various public and private databases to source all inputs to fully automate its models, said Sabato adding that the company plans to cover 8.5 million Indian SMEs through its models by end of the financial year.
The announcement comes amid the impact of COVID-19 on small businesses in India where lenders have largely remained risk-averse in disbursing new credit to the MSME sector which Wiserfunding executives feel is because of “non-technology-based lending” where models have low prediction accuracy.
The London headquartered team will set its office in Mumbai which will be headed by Avantika Goel as the Country Head. The target is to partner with 3-4 banks and 8-10 NBFCs by 2021. Under Goel the company also plans to hire more staff and set up on-ground services as well.
“India is a large market with 42.5 million SMEs and there is an urgent need for an unbiased credit risk assessment service that can provide the business credit score and risk profile of any company within a few seconds using the cloud-based platform,” said Goel.
The London-based company was co-founded by Sabato and Professor Edward Altman who also invented the famous Altman score in the late 1960s which predicted a small business’ likelihood to go bankrupt.
The company uses an advanced version of Altman’s credit scoring model to predict credit risk. It uses artificial intelligence to assess the credit quality using financial history as well as publicly available structured and unstructured data - such as corporate governance, management experience macroeconomic indicators, Altman who is also a Professor of Finance, Emeritus, at the New York University’s Stern School of Business, told ET.
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