CredRight, an NBFC firm that serves small business owners, raises $10 million in funding

CredRight, a Non-Banking Financial Company (NBFC) that bridges the credit gap for India’s smallest business owners, has raised $10 million in a Series B funding round led by Abler Nordic, marking its first investment from the new Fund V.

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Existing investors Michael & Susan Dell Foundation and Unleash Capital also participated in the round.

The firm will use the raised funds to expand loan book, upgrade its technology platform and extend its reach to more entrepreneurs in Tier-2 to Tier-4 towns.

Abler Nordic, now the company’s largest equity investor, will work with the management to scale operations, strengthen governance, and deepen impact.

Founded in 2016 in Hyderabad by Neeraj Bansal, an alumnus of BIT Durg and IIM Lucknow, and Vineet Jawa, an ISB alumnus and serial entrepreneur, CredRight operates a “phygital” model that blends digital lending with a network of 125 low-cost branches across four Indian states.

The firm claims that it currently serves more than 20,000 micro-enterprises, many of them small shopkeepers and traders excluded from formal credit. Its backers also include YourNest Venture Capital, 100Unicorns and Accion Venture Lab.

“Micro enterprises will play a significant role in India’s journey to a $10 trillion GDP. Access to institutional capital accelerates their growth and resilience. This fundraise, despite industry headwinds, is a testament to CredRight’s business model,” said Neeraj Bansal, co-founder of CredRight. 

CredRight said that India’s MSME sector faces a staggering estimated credit gap of $530 billion, of which $169 billion lies in the micro segment. Only around 14% of the country’s 64 million micro-entrepreneurs have access to individual business loans, with the gap most acute in semi-urban and rural markets. 

“This first investment from Fund V reflects both our confidence in CredRight’s model and our strong commitment to India as a priority market. By supporting CredRight with patient capital and active ownership, we aim to back a locally-rooted solution that effectively addresses this gap,”said Arthur Sletteberg, Managing Director at Abler Nordic.

Rakesh Goyal, Head – Financial Services, Michael & Susan Dell Foundation India, added, “Nano or micro entrepreneurs form the backbone of India’s economy, yet most lack access to fair and flexible capital. CredRight is changing that by blending technology with community reach, helping thousands of small businesses boost income, create jobs and achieve financial security.”

According to the 2023 60 Decibels Microfinance Index, over 70% of CredRight customers reported increased income, higher savings, and better financial management after receiving loans. The firm said it aims to empower over 10 million nano enterprises across India’s underserved markets.