UK based fintech Wiserfunding announced its entry into India, launching its Artificial Intelligence (AI) backed cloud-based credit risk assessment tool targeted for small and medium enterprises (SMEs). Wiserfunding arrives at a time when SMEs across India are struggling due to the COVID-19 impact and the available models in the lending sector are not specific to SMEs, are largely non-technology based and have low prediction accuracy.

The London headquartered fintech aims to invest USD 3 – 5 million over the next three years to tailor credit risk models specifically towards Indian SMEs to reach an accuracy level above 80 percent. 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 they already do in Europe. 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. 

The fintech is backed and co-founded by Professor Dr. 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 as well as publicly available structured and unstructured data such as corporate governance, management experience & macroeconomic indicators. The model is unique as it provides geographical and sectoral segmentation to maximize prediction power and is tailored specifically for SMEs.

Dr. Edward Altman, Creator of the famous Altman Z-score methodology for assessing the financial health of companies and Co-founder, Wiserfunding said: “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. 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.”

NPAs in the SME sector is a growing concern in India and it has adversely impacted the balance sheet of the banks. Wiserfunding’s solution will help lenders and investors tailor their pricing and increase the efficiency of their lending. This could further increase the availability and quicken the disbursal of funds to SMEs and reduce the high NPA issue faced by the industry.

This is Wiserfunding’s first international office outside Europe with Ms. Avantika Goel, relocating from London to Mumbai, as the Country Head of India.

Dr. Gabriele Sabato, Co-founder and CEO, Wiserfunding said: “We are delighted to have the opportunity to enter the Indian market in a moment when support to SMEs is so critical. Our models and technology will be a substantial help to lenders and investors to select the most resilient SMEs and provide them with the necessary funding to overcome the current crisis. We are fortunate to have Ms. Goel supporting us on the ground to build a strong local team. We strongly believe that India will quickly become one of our most important markets.”

Ms. Avantika Goel, Country Head of India said: “We’re very excited to launch Wiserfunding in India and committed to set up a successful operation in the country. 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.”

Wiserfunding aims to target bank and non-bank lenders, investors, funds, insurance companies and SMEs. Wiserfunding has been operating globally across 38 countries with clients in the UK, Italy, Portugal, Germany, Netherlands, Poland, Latvia, Singapore, Thailand and South Africa. The company’s solution has been adopted by more than 40 bank and non-bank lenders and investors across the world.