Mumbai-based fintech startup MudraCircle is using a tech-enabled alternative scoring model to provide credit access to small businesses that are normally not given loans by either banks or NBFCs.
(By Thimmaya Poojary)
• Credit is the lifeline of any business or economy, and more often than not, a vast majority of people are seemingly unqualified to receive this money. In an attempt to help small business owners or individual businesses avail credit, MudraCircle was started by Vaibhav Mishra, Anand Mishra, and Amit Kumar in 2018 in Mumbai. Vaibhav says, Studies have shown that 92 percent of SMEs or self-employed business are unfunded in India. This means they generally cannot avail credit either from a bank or NBFC.
• MudraCircle is looking to change this through a combination of technology, banking experience, and an understanding of business dynamics. This fintech startup brings together borrowers and lenders onto a single platform. Over the last one year, it claims to have enabled the disbursal of around Rs 10 crore of loans.
• Vaibhav has been into banking for nearly two decades now, while Anand and Amit are technologists. With his experience in different functions in the banking sector, Vaibhav says he came across many people who just could not avail of credit as the parameters set by the bank did not fit their profile. This was also compounded by the fact that banks or NBFCs were regulated bodies so they could not create any alternative lending models. Vaibhav says, There was this large pool of people, which was unfunded though there was cash in the system and there was a lot of digital activity happening.
• This gave the founders a sense of opportunity, which led them to start their bootstrapped venture. We decided to integrate all this data with the digital process and create an alternative scoring model, which is robust as well as flexible, he adds.