CreditMate, a Mumbai based startup that is into small value lending for second hand vehicles, largely 2-wheelers, is set to raise funding of $5 -10 million (Rs 33.5 to Rs 67 crore) from Paytm, according to a report in Economic Times. However, the exact figure is not known yet. Paytm had earlier also invested in CreditMate, and again, the amount invested remains undisclosed.
CreditMate claims it has had a phenomenal growth in its lending portfolio after it received the previous funding from Paytm and has clocked an increase in the number of loans disbursed by over 40%. The company says it has received around 15,000 applications for loans and of this,10,000 were found eligible and the loans disbursed to them. The average ticket size of a loan at CreditMate is Rs 52,000. This is because they pick up second vehicles being sold for lending to the buyers.
CreditMate is a digital lending platform and the loan applications are assessed for eligibility using technology. Interestingly, a majority of loan seekers on CreditMate’s platform are first-time borrowers and many of them are self-employed, a category that finds it difficult to access loans through the normal lending channels like banks and NBFCs.
The startup says they have been successful in keeping the defaulters on repayment of the loans to as low as 1%. They are able to offer longer gestation periods for the loan repayments than the banks do.
“More than 60% of our customers are new to credit and more than 50% are self-employed. Hence we use technology to assess the borrower,” ET quotes CreditMate chief executive officer Jonathan Bill as saying.
Before raising funds from Paytm in 2017, in October 2016, CreditMate raised $500K from India Quotient.
CreditMate is now looking at entering into automobile insurance business next. Paytm may again be there to support it in this effort too.