Germany-based digital lender Kreditech, which uses big data and machine learning to check customers‚Äô creditworthiness as well as better understanding of their needs,¬†has been granted a license by the Reserve Bank of India to operate as a non-banking finance company (NBFC) for digital lending business and app-based financing, according to a press release.
In India, the digital lender plans to provide individualised direct-to-consumer loans as well as its Lending-as-a-Service Solution (LAAS) for vendors, it said. LAAS permits its partners to provide customised credit products to their customers.
Kreditech uses its own technology for credit scoring of the consumers which helps it to determine credit risk for even thin-file customers and target underbanked customers who never applied for a credit and thus have no credit profile.
‚ÄúWith a market potential of roughly USD 1 trillion in revenue for the next five years, India clearly is the most promising emerging market for Kreditech‚Ä¶Our proprietary credit scoring technology can assess an applicant‚Äôs creditworthiness in seconds and with higher precision than traditional credit-bureau based systems can,‚Äù said David Chan, CEO at Kreditech.
It offers large-ticket, long-duration loans through the web and mobile channels to consumers with lower purchasing power; and uses an artificial intelligence-based algorithm to offer financial products tailored to the individual requirements of the consumers.
Further, Kreditech‚Äôs MD and CEO (India operations) Ashish Kohli said that Indian consumer lending industry is seeing a major disruption via technological innovation like real-time scoring models on the basis of machine learning and big data algorithms.
Headquartered in Hamburg, Kreditech currently has operations in Russia, Poland, Spain and India. It is funded by investors such as Varde Partners, PayU, J.C. Flowers, International Finance Corporation (IFC), among others.
In March, Kreditech announced to tie-up with PayU to offer instant short and medium-term shopping credits for their cart amount at the checkout of popular e-commerce websites.