Wiserfunding enters Indian market, to provide lending solutions for SMEs

The UK-based fintech firm Wiserfunding on Tuesday said it has entered Indian market, and will tie-up with banks and NBFCs to provide credit risk assessment solutions for targeted lending to SME sector.

Wiserfunding has launched its Artificial Intelligence (AI) backed cloud-based credit risk assessment tool targeted for small and medium enterprises (SMEs), it said in a release.

The existing models in lending sector are not specific to the SMEs, largely non-technology based and have low prediction accuracy, it added.

"The London headquartered fintech aims to invest $35 million (about Rs 37 crore) over the next three years to tailor credit risk models specifically towards Indian SMEs to reach an accuracy level above 80 per cent," Wiserfunding said.

"The company plans to partner with 3-4 banks and 8-10 NBFCs in India and cover 8.5 million Indian SMEs through its models by end of the financial year," it added.

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 as it already does in Europe.

The fintech firm is backed and co-founded by Professor Edward Altman, one of the pioneers of credit risk analytics since the late 1960s and the inventor of the famous Z-score.

The new SME Z-score by Wiserfunding uses AI to provide accurate, reliable and unbiased credit risk assessment tools to assess the credit quality of SMEs using financial history.

It also uses publicly available structured and unstructured data such as corporate governance, management experience & macroeconomic indicators for lending assessment, the statement said.

Wiserfunding said its model is unique as it provides geographical and sectoral segmentation to maximise prediction power and is tailored specifically for SMEs.

"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," said Altman.

He said Indian banks and financial institutions will definitely see a significant benefit in using a more independent and unbiased risk assessment platform with the entry of AI-powered models

Wiserfunding aims to target bank and non-bank lenders, investors, funds, insurance companies and SMEs, its India country head Avantika Goel said.

The company has been operating globally across 38 countries and its solution has been adopted by more than 40 bank and non-bank lenders and investors across the world, it added.