The gross non-performing assets (NPA) of Indian public banks fell by USD 12.56 billion in the financial year ended March 2019. One of the people who made at least a fraction of this possible is Meghna Suryakumar, who started Crediwatch in 2016. Suryakumar’s firm provides a “trust score” that evaluates businesses that apply for loans from banks, which then determine whether to take on the new debtors.
Suryakumar said while there are many digital lending businesses that have sprung up in India recently, 50% of the country’s loans are given by public sector banks, and public sector units (PSUs) that don’t have the right information about their applicants.
“If you look at what happened in the last two years, we have had a lot of friction in the industry in terms of NPAs, and a lot of fraud by SMEs. This problem can be solved if the industry has access to the best technology and the right information, so that they can take an informed decision before loaning money to an SME,” Suryakumar, co-founder and CEO of Crediwatch, told KrASIA.
With an aim to work with public and private financial institutions such as banks, PSUs, and non-banking financial companies, Suryakumar started Crediwatch with the help of her techie husband, Sandeep Anandampillai.
The company claims it tracks publicly available data about SMEs and maintains digital ledgers for 18 million businesses. Suryakumar said their product can be used by anyone—lenders, customers, as well as vendors—to understand the financial dynamics of another party.
Riding on India’s digitization drive
As a corporate lawyer, Suryakumar ran a cross-border law firm Kelsaa in New York, specializing in mergers and acquisitions, private equity, and venture capital transactions. “This required us to do a lot of due diligence, which means I would always be looking at data sources about companies to find information,” she said.
In 2010, Suryakumar moved to Bengaluru as her India practice had really lifted off, and “a lot of entrepreneurs and companies I was representing had cross-border startups headquartered in India.”
She said she was surprised to see the Indian government’s enthusiasm for digitizing information, especially corporate data, and making it publicly available as the government slowly created more transparency in business deals.
The first major organ to be digitized was the Ministry of Corporate Affairs. In a rapid transition, a lot of new data became available to anyone who knew how to query the set—background information of businesses, product costs, price quotes, and other materials.
“I saw this as a really big opportunity, as due to my past work experience I knew the importance of such kind of publicly available data which could solve a large and complex problem,” Suryakumar said.
The husband-wife duo put their respective expertise into practice, and created a digital product that could make sense of data and analyze it for financial institutions.
The company collates the digital footprints of SMEs, generating a profile that includes the corporate information of a business, its partnership with other commercial entities, as well as records of proprietorship through their shop, and commercial registrations, which Suryakumar said is public information in many states.
“We look at any information that is digital, available under the right to information act, or is openly available from the government. Apart from that, we have partnerships with other sources like the Bombay Stock Exchange, and Press Trust of India, among others,” she said.
Channeling these resources, Suryakumar said Crediwatch is able to calculate dynamic trust scores for companies and shares this information with financial institutions. It counts RBL Bank, Barclays, YES Bank, as well as financial services companies like Bajaj Finserv, and Capital Float, among some 20 clients at the moment.
Using AI to predict a company’s growth
Earlier this month, the company raised USD 3.2 million in a Series A round led by California-based early-stage investor Artis Labs, with participation from Abstract Ventures. In its statement, the company said it’s going to use the money for research and development efforts, as well as the commercialization of its product.
“When we started, we only had two to three sources of data to refer from for analyzing a company. Now we have about 2,500 sources of data, which we use to create the dynamic trust score for SMEs. We will use the funds to grow that product by improving the AI-enabled predictive model,” Suryakumar said.
The company earns revenue from subscriptions, where financial institutions pay for each query for a company’s information, as well as from generating trust scores—its trademark product.
“It means we provide information related to the dynamic risks involved in a business, should you lend to this business—What is going to happen to this company five years down the line? Is it going to be financially stable in the near future?” she explained.
This article is part of “Women in Tech,” a series by KrASIA that highlights the achievements of women who are a driving force behind South and Southeast Asia’s tech startups.