Wiserfunding enters India, rolls out credit risk assessment tool for MSMEs

London-headquartered fintech company Wiserfunding has announced its entry into India, launching an artificial intelligence (AI) backed cloud-based credit risk assessment tool targeted at small and medium enterprises (SMEs). 

The company aims to invest $3-$5 million over the next three years to tailor credit risk models specifically towards Indian SMEs to reach an accuracy level above 80%, it said in a statement. 

The investment will also help develop technology to connect to various public and private databases to source all inputs to fully automate its models. The company plans to partner with banks and NBFCs (non-banking financial companies) in India and cover 8.5 million Indian SMEs through its models by end of the financial year, the statement added.   

Wiserfunding was founded by Edward Altman and Gabriele Sabato to assess the credit risk of small and medium sized enterprises (SMEs). Wiserfunding uses past financial history and a range of publicly available structured and unstructured data to assess the credit worthiness of SMEs. Altman is a professor of New York University and has been in the credit risk analytics field since the late 1960s. He is also the inventor of the famous Z-score, which is a financial assessment tool for credit risk analysts and lenders. 

“Our mission is to empower SME growth in India and there isn’t a better time than now. Typical to any economic shock, bank lending is expected to reduce for SMEs, making it more difficult for them to survive. It will be important to have a reliable and accurate assessment of businesses’ viability and technology will be central to such analysis,” Altman said. 

The company operates across 38 countries with clients in the UK, Italy, Portugal, Germany, Netherlands, Poland, Latvia, Singapore, Thailand and South Africa. It claims that its solution has been adopted by more than 40 bank and non-bank lenders and investors across the world.  

This is Wiserfunding’s first international office outside Europe. Avantika Goel will relocate from London to Mumbai, as the country head of India.

“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. This would help SMEs looking to learn about their own and competitors’ credit profiles as well as banks, NBFCs, insurance companies, funds and investors looking to invest in these SMEs,” Goel said. 

The fintech space in India has seen significant activity lately. Last week, Tencent-backed fintech startup Niyo acquired Alphafront Finserv-run mutual funds investment platform Goalwise in a cash-and-stock deal.  

Around the same time, Pickright Technologies, a marketplace for stock market investors and advisors, raised $175,000 in a seed funding round from serial investor Sanjay Mehta-led venture capital firm 100X.VC and a group of angel investors. 

Last month, Fintech firm Jodo raised $3.8 mn from SAIF, Matrix and angel investors.